How to master the auction process when buying a property

What every buyer needs to know before auction day

Buying a property at auction can feel intense, fast-paced, and unforgiving. Auctions are unconditional, emotions run high, and decisions are made in real time. Without the right preparation, it is easy to overcommit or miss opportunities altogether.

The good news is that with careful planning, financial clarity, and the right professional advice, buying a home at auction can be a confident and rewarding experience. Whether you are a first-home buyer or a seasoned investor, understanding how auctions work and how to prepare properly will put you in the strongest position on the day.

Get your finances auction-ready

One of the most important steps before attending an auction is getting your finances in order. Auctions are unconditional, which means there is no finance clause or cooling-off period once the hammer falls.

Pre-approval is essential. It gives you certainty around how much you can borrow, what your repayments may look like, and how far you can bid with confidence. However, not all lenders assess auctions or properties in the same way.

Speaking with a mortgage adviser before auction day can help ensure your borrowing power is fully maximised and structured correctly. Even if you already have pre-approval, your lender should still review and approve the specific property you plan to bid on to confirm they are comfortable using it as security.

Set your maximum budget and commit to it

Before auction day, you need to set a clear and realistic maximum budget. This should be the absolute highest price you can afford, factoring in your deposit, approved lending, and additional costs such as legal fees, valuation costs, and settlement expenses.

Auction environments are designed to create momentum. It is easy to be swept up in the emotion of the moment and bid beyond what you originally planned. Understanding what each bidding increment means for your weekly repayments can help keep emotions in check.

A mortgage adviser can help you understand these numbers in advance so you know exactly where your financial limit sits and can stick to it with confidence.

Understand the auction contract before bidding

The auction contract is a legally binding agreement, so it is essential that you understand it fully before auction day. Ideally, your solicitor should review the contract well in advance.

Key details to check include the deposit amount, settlement date, and any special conditions attached to the sale. If you want to change any terms, such as a reduced deposit or a different settlement period, this must be negotiated before the auction.

Any agreed changes are recorded in a variation of agreement and must be approved by the vendor. Once the auction begins, the contract terms are locked in.

Tips for bidding confidently at auction

Bidding at auction can be daunting, but preparation makes a significant difference.

You will need to register to bid, so ensure you bring valid identification and complete registration early. Arriving early also gives you time to familiarise yourself with the auctioneer, the agents, and the room.

Starting the bidding can sometimes work in your favour by showing confidence and intent. When you bid, be clear and decisive. Watch other bidders closely to understand their behaviour and limits.

Most importantly, remember your maximum budget and do not exceed it, regardless of pressure or competition.

What happens if you win the auction

If you are the successful bidder, you will be required to sign the auction contract immediately and pay the deposit on the spot. Make sure your deposit funds are accessible and ready to transfer on the day.

This is where having professional advice throughout the process pays off. A mortgage adviser can help ensure your finance is aligned, your deposit arrangements are ready, and nothing is left to chance once the auction concludes.

With the right preparation, buying at auction does not have to be stressful. It can be a clear, decisive, and successful way to secure your next property.

For more information and to talk through how we can best help you, please contact us at info@krispedersen.co.nz or call the office at (09)4864719, and we can discuss what you want to achieve from there.

About the author: Kris Pedersen is a leading figure in mortgage advising and property investment, consistently ranked among the country's top six mortgage advisers for the past four years. With over a decade of experience, Kris is the preferred choice for investors seeking expert guidance to expand their portfolios. He shares his insights as a respected speaker at Property Investor Association groups, and his expertise extends to New Zealand and overseas property and finance markets, with regular features in NZ Property Investor Magazine. Kris Pedersen and Kris Pedersen Mortgages Limited are registered financial service providers, ensuring transparency and reliability in all financial dealings. Their credentials on the Financial Service Providers Register can be viewed here: https://fsp-register.companiesoffice.govt.nz/