Buying a property at auction
comes with a number of unique considerations that may not necessarily apply to direct purchases.
Whether this is your first auction or you are a seasoned pro, it is important to be as prepared as possible in order to avoid being caught out by any unforeseen circumstances.
Firstly it is imperative that you familiarise yourself with the whole auction process, so why not attend a few auctions for properties in your preferred suburb to observe how they work? By understanding how an auction plays out you will feel more comfortable when it comes time to join the action.
Once you have your eyes set on a specific home, spend a few hours researching the area it is located in to gain a feel for the local market - comparing sales prices of similar houses or units nearby is a good start.
Prior to the auction you will need to ensure that you have carried out sufficient inspections and have access to at least a ten per cent deposit bond in case you are successful.
Arrive early on the day and register with your identification.
Most importantly, set yourself a limit then bid with confidence and don't allow rivals to be intimidating - you are just as prepared to win this auction as they are.
The auction bidding process
A successful house or unit purchase at auction involves going through a number of important stages - and you'll want to pay particular attention to the bidding process.
Firstly, don't forget to register your bid on the day - you will require identification for this.
It can prove highly beneficial to take along a person who is not emotionally attached to the property, as they will hopefully be able to offer rational reminders that prevent you from bidding above your pre-stated limits.
If the bidding is slow or has not been initiated, the vendor may choose to submit an opening bid to push the price closer to the reserve.
The vendor's reserve price is the minimum amount they are willing to settle for - once it is reached, the property becomes open to be sold at the auction, while if this level is not reached the property may be passed in and a sale price potentially negotiated afterward.
The auctioneer must call the sale three times for it to be finalised, at which point he or she will call out "SOLD".
As the successful bidder it is vital that you are ready to pay a ten per cent deposit at the fall of the hammer. And remember that there is no such thing as a cooling-off period at auction - it is an unconditional purchase.
If the property does not reach the reserve, the bidder has the right to walk away from negotiations.
Looking for more Property Buying Tips?
- myMarket Report - Your National and Regional Property Report
- Your Complete First Home Buyers Guide
- Open House Inspection Checklist
- Open Apartment Inspection Checlist
- Your Home Your Mortgage
- Home Loan Glossary
- Your Complete Moving Guide
- Understanding the Buying Process
- Different Ways to Buy a Property
- Buying a Property - The Hidden Extras
- How to Work Out the Budget You Can Afford
- Where to Research the Find the Best Property