Buying at Auction
Do your homework
- Check out the neighbourhood and its facilities - schools, public transport, restaurants and other amenities.
- Monitor property sales in the area and attend several open houses so you can confidently assess property values.
- Inspect the property two or three times before the auction to be absolutely certain it is the one for you. Remember: there is no cooling off period.
- Attend some auctions to get an understanding of how the process works so that you are confident on the big day.
- Arrange for finance beforehand. Make sure that you contact your loan consultant and know exactly where you stand prior to bidding at auction.
- Have a builder or architect thoroughly inspect the property you are interested in buying.
- Always have your solicitor check the contract thoroughly before the auction.
- If you are not comfortable bidding and you are very interested in the property, then make a pre-auction offer or arrange for a friend or relative to bid for you.
- Prior to the auction, set a firm limit on what you are willing to spend and stick to it.
- Try to get a realistic understanding of the price range but remember that no one has a crystal ball: what the agent quotes as the likely selling price may be off the mark either way.
- Decide on your bidding strategy. As you get close to your limit, don't be afraid to increase your bid in small bites: the auctioneer will usually accept these.
- When you do bid, bid with confidence.
- Avoid getting into a personal bidding war with another bidder.
- Try not to get too emotional about a property: there will always be other places to choose from. If you want it at all costs, that is exactly what may happen!
- Always take your chequebook to the auction. If successful your deposit will be held in trust until the settlement.
- If you bid, but the property is passed in, the auctioneer may invite you to negotiate. The highest bidder is normally given the first right to negotiate.
- If your auction bid is successful, once the property is "knocked down" to you as the buyer, you are required to sign the contract and pay a deposit, which is usually 10 per cent of the purchase price.
- Immediately organise insurance cover to protect your interest in the property. Do your research and comparison-shopping of policies prior to auction.
- If you need to sell a property to purchase at auction, speak to your CENTURY 21 agent beforehand to see if you can arrange for an alternative settlement date.
- Access to the property is not a given right before settlement. Arrange this with the seller through the agent.
If you really want the property and don't want to bid at auction, you can put in a pre-auction offer. Many properties are sold this way. Some vendors will still want to go to auction, but many are willing to negotiate.
Glossary of Property Terms
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