Are You Buying at Auction?
For many, purchasing a property at auction can be a daunting experience. The following information aims to demystify the auction process, enabling you to proceed with confidence. Many people find auctions intimidating because the process is often not clearly explained.
Whether it’s your first property purchase or you’re a seasoned investor, buying property can be stressful. It takes time to research the market to be fully informed. When purchasing a property at auction, conditions are usually not in your favor, but at least you know you’re getting the property at actual market value.
Understanding the Auction Process
During an auction, bids are called for on a specific day and time, allowing you to see what other buyers are offering. This transparency removes the uncertainty often found in private sales with multiple offers.
If you’re interested in an auction property, don’t play the ‘I’m not interested’ card unless you’re okay with missing out. Properties may be sold before the auction, so express your interest early. If you prefer discretion, have a friend inquire about the property for you.
Frequently Asked Questions About Buying at Auction
Yes, you need pre-approved finance to bid at an auction, allowing you to bid with no conditions of sale. Typically, a 10% deposit is required at the auction. Ensure you have a reliable finance broker familiar with the area to help organize your finances beforehand.
Typically, auctions have a 30-day settlement period from the auction date. However, it’s often possible to negotiate an extended settlement with the selling agent before the auction.
Inspecting multiple properties in the area will help you gauge approximate values. Agents can provide guidance and show you similar properties and their sale prices. Searching realestate.com.au and other websites for recent sales and new listings in the area is another excellent way to estimate the property’s value. For precise valuation, consider a registered valuation or check real estate websites. Hiring a buyer’s agent can also save you time and money.
Yes, you can. Some owners might consider selling before the auction. By making an offer, you indicate your interest, and the agent will keep you informed of any developments.
The seller has the right to bid for themselves in the form of a vendor bid, which is disclosed by the auctioneer. This bid is used to build bidding momentum and is always below the reserve price.
Yes, there are several ways to bid if you cannot attend. A buyer’s agent can bid for you using effective strategies. Alternatively, you can authorize the selling agency or have a friend or relative bid on your behalf. Contact the agent before the auction day to arrange this.
Bidding and Buying at Auction
Here is a checklist to ensure you are prepared for the auction:
- Can I bid on the terms and conditions advertised?
- Do I need to request a variation of these terms, such as settlement or deposit?
- Have I researched recent sales?
- Have I provided the necessary forms and identification to bid at auction?
Bidding Tips
- Arrive Prepared: Arrive on time, calm, and composed. Choose your favourite bidding number for good luck.
- Set Your Limits: Write down your bidding limit before the auction, considering five levels:
- Ideal price
- Good deal price
- Regret price (where you’d regret not bidding higher)
- Maximum acceptable price
- Walk-away price
- Be Aware of Others: Stand at the back and move around to observe other bidders.
- Have a Strategy: Plan your bidding strategy in advance and be ready to act quickly.
Additional Tips
By preparing thoroughly, you can bid with confidence and control, increasing your chances of securing your desired property at auction.
For more information and to get the property inspected before the auction, contact your local Leading Building Inspector at:
Phone: 1800 532 346
- Locations
