Finding and falling in love with a property can be an emotional roller coaster, especially if it’s the “one”!
If the “one” is set to go to auction and it’s the first time you’re thinking of buying at auction or you haven’t purchased a property at an auction for some time, it’s perfectly natural to feel some reservations about the process and how it might all play out.
If the property you have your eye on is set to go to auction, the most important thing is to be well prepared, have a plan in place and (try) to stay cool under pressure. Things happen quickly at an auction so being ready to act and feeling confident in what you’re doing will help.
Before Auction Day
It may be obvious but doing your research is key to being prepared. Try to get a true feel for the local market and understand the process on auction day. It may help to attend other auctions beforehand if possible to have an idea of how an auction works and what it might be like.
When it comes to the property you’re interested in, read the contract thoroughly and ask all the questions you need to prior to the big day, such as deposit amounts, settlement terms etc.
It’s a good idea to have your Solicitor look over the contract before auction day and negotiate any additional terms you may require. Your Solicitor will likely recommend that you do due diligence as well so perhaps be prepared to have a pest and building report done prior to the auction.
Secure written, unconditional finance approval from your finance provider as once you sign the Contract you are bound to that contract. You must pay the deposit at the time of signing the Contract and then have your balance of funds available for settlement. There is no “Cooling Off” period at Auction so bear this in mind.
It’s easy to get carried away during an auction with emotions flying high and before you know it, you’ve placed a bid $20,000 over your budget! Set your budget BEFORE the auction and more importantly, stick to it!
On Auction Day
It’s game day! Have your ID ready, register to bid and receive your bidding number. Don’t hide in the crowd, make yourself shown, ask the agents and auctioneer questions and show the other bidders you are ready to participate and mean business!
Make strong, confident bids, hold your bidders card up high and record all the bids so you can keep track of where the bidding is up to.
Do your best to stay calm. We know that’s easier said than done but try to give the impression you know exactly what you’re doing. Don’t forget, the other buyers are probably feeling the same way as you.
If your bid is the highest bid taken by the Auctioneer and is above the Vendor’s reserve price you will purchase the property.
If your bid is the highest bid taken by the Auctioneer but hasn’t reached the vendor’s reserve price, then the property will be passed in. You, as the highest bidder, will have the first opportunity to buy the property at the vendor’s reserve price. The auctioneer may or may not announce that the property is on the market and is going to be sold. The best policy is to ensure you are the highest bidder if you want to buy the property.
If the property is passed in on a vendor bid then the vendor via the vendor’s agent is at liberty to discuss the purchase of the property with any genuine buyers.
Remember, if you want to buy a property at auction you MUST bid.
The most important thing to remember is to keep within your budget and be prepared to walk away. There are always new properties coming onto the market each week so if this one doesn’t work out, there will always be another.
Our team are always available to chat if you have any questions regarding buying at auction and are here to help you along the way!