BUYING AT AN AUCTION


Deirdre Remax Auction Property
Auctions can be a daunting time to buy a property, unless you are prepared and experienced. You might have no idea of what the property is worth or what the auctioneer is expecting. Some auctioneers have adopted a policy of publishing the Auction Reserve in order for the whole process to be transparent, or might only do so for a particular sale.


Additionally, the reserve price is normally only finalised and published a few days before the auction date.

 
Auctions are however done in a set time frame and you need to have things sorted out so that you don’t miss out on your dream property.
 
Here are a few pointers that will help you in your purchase but remember that this information should only be used as a guide. Always seek legal and professional advice when buying any real estate. Every situation is different so make sure you are prepared. Enjoy the process and enjoy your new house if your buy one.
 
BEFOREHAND:
 
Do your Research
When you are looking in an area, whether buying ‘for sale’ or through an Auction, research the prices in that area for the type of property that you want. Find out about the good and bad features of the area, and comparative prices to other areas. Look at similar properties to the type that you are seeking. Your Estate Agent has access to all of this information and will be able to assist you.
Attend Local Auctions
 
It is valuable experience to attend as many local Auctions as you can to see how the Auction proceeds. Observe how people bid, and who is at the Auction. Work out people’s style of bidding. The same people may be bidding against you for your property in the near future. Don’t be afraid to chat to the auctioneer about protocol and getting a few pointers.
 
Ensure that you have your Finance in place prior to the Auction. Establish you bidding limit. Make sure you allow for all extra costs that may be involved and leave a buffer for bidding so that on the day you know exactly what it will cost you when doing your bidding. See my Finances Page for bond originators that will assist you in pre-qualification.
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WHEN YOU HAVE DECIDED ON THE PROPERTY:
 
Register your Intent with the Agent
Advise me if you are interested in a property. I will be able to give you more information on the property and guide you through some other things. Additionally, I could perhaps negotiate for you to purchase the property prior to auction date if you really have your heart set on it.
 
Affirm your Bidding Limit
It is important that you set your own bidding limit. Decide what the property is worth to you based on what you can afford. Talk to your local mortgage broker or bank for this as they can give you advice on repayments at any given cost.
 
Check the Paperwork
If you are seriously interested in a property and intend to bid you should have your lawyer inspect the Contract of Sale. It is a good idea to have a good read through all the paperwork related to the Auction beforehand. Wherever possible, contact the Agent handling the sale and ask them to provide you with a copy of the documentation. This is normally possible in the week prior to Auction. Read through all of the documents and always ask if you are unsure of anything. It is important to clarify details such as settlement terms, deposit and fixtures before the auction commences. If you do not have a lawyer, see my Legal Page for firms of good repute.

Inspections
If you want building and other inspections done, do it before the Auction. It is not possible to make an Auction purchase conditional on inspection results. Make sure that any reports or inspections have been carried out to your satisfaction before you attend the Auction.
 
Ask for Help
Many people find the Auction process daunting. Don’t be afraid to ask a friend or relative or even have me attend and assist you with your bidding. Many people ask someone else to bid on their behalf as they may be less inclined to bid emotionally and will not exceed a predetermined limit. Make certain however that you know what you want me to achieve on the day so that there are very clear instructions in writing on what I can and can’t do on your behalf.
                                                                                                                                                               
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ON AUCTION DAY:
 
Check the Contract of Sale again
Deirdre Remax House Auction

On the Auction Day you should always check that your copy of the Contract of Sale is exactly the same as the original Auction Contract and that there have been no late changes. 
 


Bidding

Remember how an Auction looks from the Auctioneer’s perspective. They are often looking at a large number of people who are invariably turning around, whispering etc. If you are standing at the back of this scene, or hidden in the shade of a tree, the Auctioneer may well miss your bid, particularly when you are bidding for the first time. Stand in clear sight of the Auctioneer and make your first bid obvious to them. After this first bid, you have their attention and they will be looking to you for increases.
 
Make sure the Auctioneer understands what you are doing. Bid early, clearly and confidently, and avoid unusual sign language that may be misunderstood. Use the same signal each time to bid.

Buyers are usually reluctant to start the bidding at auctions but the best policy is to bid loudly and confidently signalling to all other bidders you intend to purchase the property or should the reserve price not be reached that you are given an opportunity in any further negotiations.

Check out the article on Australian bidding techniques for some really interesting and valuable tips here
 
Keep Control of your Bidding
If the bidding is increasing in larger denominations than you are comfortable with, consider offering a lower denomination as your bid. The Auctioneer does have the right to refuse it, but there is absolutely no harm in trying.
 
It is important not to be drawn into a bidding war on a property you want. Emotion can lead to you paying more than you can afford and there is no cooling off period with an Auction.
 
Making the Deposit
When the property is sold at the Auction you are required to sign the Contract of Sale and pay a deposit of usually 10% on the spot. This can be paid by Personal or Bank Cheque. Make pre-auction arrangements with your bank as required.

 Happy Bidding and remember that I welcome and questions or comments - so feel free to contact us


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