For many, weekend property auctions have become a means of research and general enjoyment for many real estate enthusiasts.
A professionally run, transparent auction can be a successful and satisfiying transaction experience for both the buyer and seller and should not be something to fear or avoid. As a buyer, it is essential to understand the conditions of sale by auction prior to attempting to participate in a formal auction.
If you have any doubts as to the auction process or contract conditions, it is recommended that prior to auction that your solicitor review all documentation.
How to bid at Auction
- Attend a couple of Auctions to get the feel for how they work.
- Have a game plan in relation to how much you can spend. Discuss this with your Real Estate Agent so they can help you secure the property.
- Arrive early to give yourself plenty of time to register as this is required before you can legally bid for a property.
- Make sure the Auctioneer can see you and hold up your bidder number and call out your bid clearly. Generally the Auctioneer will nominate the increase they will accept i.e. “Will go in rises of $10k or $20k from here.”
- By bidding early and strongly, it sends a message to the other buyers you are serious and they might not wish to compete for the property. This puts you in a strong position.
- If the property has not met the reserve, you have not spent any money and all you have done is have a bit of fun, so don’t be shy.
- If you propose to bid on behalf of another person, you must provide a letter of authority and provide the name and address of that person or persons to the Auctioneer in order to register them as bidders in the bidder register. If you are not sure, your Real Estate Agent can help you with this.
- Make sure you are familiar with the terms and conditions of the Auction prior to bidding at the Auction. The Auctioneer will read out some or all of these out prior to the start of the Auction. If you are not sure of anything, ask your Real Estate Agent or Auctioneer prior to the start of the Auction.
- When bidding at Auction, remember that if you are the successful bidder you will be required to sign the contract of sale and pay a deposit of 10% or a nominated amount on the spot.
Important Points to Remember
- There is no cooling off period when buying at Auction.
- Have your finance organised prior to the Auction.
- Always speak to your Agent about the deposit required at least a week before the Auction.
- Consider getting a Pest and Building inspection prior to the Auction.
- Only bid within your means but bid strongly and confidently.
- If the property is passed in, the property is then on the open market.
- You have the best chance to buy the property for the best price at Auction as the terms and conditions are favorable to the seller.
- If the property is passed in you then can make an offer with conditions on it but you need to act swiftly and generally, the best time is immediately after the Auction has concluded.
- The Auctioneers decision is final in all matters relating to the Auction.
- Make sure yourself and any other decision maker is available for the Auction and only rely on the judgement of yourselves. Do not allow other parties who are not purchasing the property to distract or influence your decision, unless they are willing to be held responsible for the outcome.
- If you are not sure about anything, ask your Real Estate Agent or the Auctioneer, as they are there to help.