Auction Tips

 

What is Real Estate Auction?

Auction is a form of marketing where the price has been removed and buyers base their opinion on value and features of home. It is designed to capture maximum attention of buyers within a set time frame. It is a very transparent form of buying property.

 

What is the Reserve Price?

The reserve price is usually set on Auction day by the owner of the property. The sales agent is generally unaware of the reserve until commencement of auction. The reserve is generally established by the feedback and response of the buyers in the market place.

 

How do we bid at Auction?

Simply attract the attention of the Auctioneer by:-

  1. Putting up your hand
  2. Calling out
  3. Nodding your head when you catch the Auctioneer’s eye

The Auctioneer usually nominates the amount of the bid he is looking for.  If you are the successful bidder, you will be asked to pay the deposit and sign the contract. If you would like some assistance with bidding or would like to discuss a bidding strategy, please speak to the agent.

 

Can I buy before Auction?

Yes, in most cases you can.  You simply submit your offer to the Agent on a standard contract of sale and if the price and conditions are agreed to, the contract is then completed and the property sold before Auction.  There are no counter offers prior to auction on any offers not acceptable to the owner.

 

I Can’t bid at auction because I can’t get finance…

That’s okay.  You can organize, through your broker, approval to bid up to a price that you are prepared to pay.  This offer may be subject to the Bank’s Valuation.  This is simple to organize and only takes a couple of days. If you can buy a property subject to finance, you can buy a property at auction. Preparation is the key.

 

I want to buy, but have a house to sell…..

There are two answers.  If you are in a sound financial position, you may organize a bridging loan.  The other way if the property is not sold under the hammer is to buy on a longer settlement date, giving you time to sell and to settle your house, but you will need to discuss this with the Representative before Auction Day. Subject sale offers can be presented post auction.

 

What price do I have to pay to buy the property?

This is the price YOU are prepared to pay.  Other people will perceive different amounts.  Generally our price will be established by what properties have sold for around the area and also the particular features that the home offers you.

 

What if the house doesn’t sell?

If the reserve is not reached, it is passed to the highest bidder.  The highest bidder then has to first right to purchase the property immediately after the Auction by negotiation with the Vendor, otherwise the property will be offered for sale to all other interested parties.

 

What contract do we sign and what are the standard conditions?

The contract is the standard contract on display at the Auction.  The usual conditions of purchase at Auction are:

  1. 10% of the purchase price paid as deposit; either by  cash or bank cheque
  2. Settlement date-30 days from the signing of the contract.
  3. Property sold on an ‘as is’ basis. If you would like to arrange a pest inspection or building report please speak with the agent so this can be arranged prior to auction day.

 

 

The 4 Prices you need to have in your mind: