Buying at Auction Part 6 - What Happens on Auction Day & Bidder Types
Buying real estate at auction
On the big day, there are several steps you need to take before getting in amongst the bidding. If you haven’t registered in the bidders record, now is the time to do so.
In New South Wales, this is generally run by the selling agent. You will be required to provide identification such as a drivers license, as well as a letter of authority if you are bidding on behalf of someone else.
Agents acting for a buyer need to provide their license number, while anyone with power of attorney can just sign up on their own.
Should you be bidding for a company, you’ll also need the organisation’s Australian Banking Number.
Remember, if you’re bidding as a couple, then only one of you needs to register.
What is Registration?
Your details and the details of the auction are recorded, and you’ll be given a bidding number. Don’t think that this registering lets you see the details of others in the record though - not even the seller gets a look at who has registered to try and buy.
These specifics are for NSW, so it’s important to check up on your local government rulings for what else you may need to do on the day.
Only registered bidders can be in the running for the property - latecomers may be able to get a late registration, but it’s best to be prepared.
The Rules of Auction
Once the auction begins, there are many rules in place that you will have to be wary of, lest you find yourself bound to a deal you aren’t happy with. The auctioneer will outline all rules before the bidding begins.
This can include their obligation to refuse bids after the hammer falls, to arbitrate bid disputes, and also to refuse bids that come from those who have not registered for the auction.
There may be more specifics depending on where the auction takes place, so check the rulings and listen carefully to the auctioneer.
It is in their best interests to ensure the auction runs smoothly too, as they can be fined up to $11,000 for accepting bids from unregistered buyers in NSW. In Queensland, a similar fine can be handed out for not showing the auctioneer’s name or license.
What Type of Bidder Are You?
When the bidding gets underway, you’ll find some strong auction stereotypes emerge. These are common at many auctions, and can be easily handled if you know what to expect - and you may even recognise yourself in some of these.
The high roller
These bidders tend to raise the bar early, as an intimidating factor. However, they can sell themselves short and end up paying more than they need to, or exhaust themselves early by flying too close to the sun and hitting the upper levels of their budget too soon.
This is a ‘slow and steady’ bidder, who is unlikely to even be heard from until the closing stages. The drawback here is they enter the bidding when the level is already quite high, so may be stretching their budget with the first bid they make.
These bidders are common, but frustrating. By laying random bids all through the auction, the newbie can be a confusing bidder that does not often succeed.
When at auction, you need to have a handle on your finances, keep a cool head and adopt traits of both the waiter and the high roller to have a good chance of victory. Luck needs to be on your side a little as well!