Thinking of buying at auction?
With more and more properties going under the hammer, you may be wondering how the process works.
Auctions can be exciting and at first a little daunting, but they can be a fantastic way to secure a property, whether is your first home or an investment property.
If you see a property that is going to auction and you think it might be for you, the first thing you need to do is an inspection.
Attend open homes and arrange a private inspection of the property so you have time to have a good look around and talk to your agent.
If you like the property, request a copy of the contract and make sure your conveyancer reviews it to make sure there’s nothing unusual like easements, covenants etc. If there’s something you’re unsure about, talk to your conveyancer and the selling agent.
You should request a copy of the pest and building report if one has been prepared or order your own. At the least you should have a builder inspect the premises on your behalf.
If finance is involved, contact your bank immediately to arrange preapproval of finance prior to the auction. Make sure you have something in writing from the bank before you bid on the property.
So you have fallen in love with the property, you have finance approved, what next?
You have the option of making an offer prior to auction, or trying your luck on auction day.
If planning on making a bid, you can register before the auction with your agent or on the auction day.
Some auctions are carried out on site, offering another chance to look at the property, others are held in an auction room where other properties will also be going under the hammer, which can be a very exciting experience.
When you arrive at the auction venue, you will be asked to provide identification, such as a passport or drivers licence for all of the buyers whose names will be on the contract.
If you are keen to bid over the phone, or have someone bid on your behalf, it’s best to talk to your agent to arrange this ahead of time.
With butterflies in your stomach, it’s time put all your hard work into play.
Find a comfy spot to sit, in view of the auctioneer so you can see what’s going on and so the auctioneer can see you!
When the auction starts, don’t be afraid to make the first bid. Too many people sit on their hands, but this is not the best way. Bid with confidence as this shows other bidders that you’re serious.
Auctions can be exciting and people can get carried away, so set yourself a budget and do your best to stick to it!
This is such as exciting time, especially for first home buyers and it’s a chance to snap up a property, often at a good price.
If you are the highest bidder, and your bid is accepted, you are obliged to purchase the property and must pay the deposit (usually 10 per cent) immediately.
In the lead up to the auction, it’s a good idea to attend other auctions to better understand how they work and to get a feel for the bidding process.
If the property is passed in, which means bids fail to meet the reserve price, the agent will then negotiate with the highest bidder on behalf of the vendor.