Auctions… you either love them or you hate them, yet they are becoming increasingly popular due to the transparency and clarity they provide for Sellers and Buyers alike. So as a Buyer, how can you position yourself in the box seat for securing your dream home at Auction?
When you buy a property at Auction it is a cash, unconditional purchase with no cooling off. With this in mind, it’s critical you have done your homework and have all your ducks lined up, prior to Auction day. Here’s what you need to know…
Is this the one?
Take time to inspect the property carefully. There are usually one or two scheduled open homes during each week of the campaign in the lead up to the auction day. On first inspecting the home you’ll get a great feel for the space and lifestyle it offers, however it’s on the second inspection that you’ll be checking for the finer details: are there built in robes, what condition are the fences in, what improvements will we want to make straight away. These points will all contribute to your final decision on what price you are prepared to pay.
Is your Finance pre-approved?
It is vital that you have your finance confirmed and know your limits, before you bid! Speak to your mortgage broker, discuss the specific property with them and ensure you are comfortable with your financial position prior to Auction Day including your Stamp Duty and transfer costs.
What maintenance might become an issue?
With the purchase of any property, it’s critical that you understand exactly what you are buying. Investing in a building inspection prior to Auction will provide clarity on any unseen issues or costs that you may face down the track, along with further assisting you in coming to the final figure you are willing to pay.
How do I decide on the Deposit & Settlement date?
Prior to Auction Day, discuss with the Sales Partner representing the property the Seller’s requirements around deposit amount and settlement dates. Standard terms for an Auction are a 10% Deposit and 30 day settlement, however variations of 5% or a set figure for the deposit along with a longer settlement date may be an option should it suit both parties.
What do I need to do to bid?
Prior to Auction day or at the inspection preceding the Auction, speak to the Sales Partner managing the property to Register to bid. You’ll fill out a form with them that includes your details, bidder number, deposit and settlement details which they will have approved by the Seller, in turn allowing you to bid. Our tip: Make sure you have your driver’s license or passport on you for ID or we won’t be able to register you! Nothing worse than leaving your wallet at home on Auction day.
Where should I stand?
Position yourself so the auctioneer can see you clearly and won’t miss any of your bids. Near the front of the crowd is always best.
When do I start bidding?
Everyone has a different tactic when it comes to bidding. The biggest tip we can give is that you need to bid to secure the home. The property will either sell under the hammer to the highest bidder or be held over to the highest bidder to negotiate exclusively with the Seller. If this really is ‘the one’, don’t be shy, bid away and get yourself in the best position to secure the property.
When do I stop?
Know your limit and stick to it! Buyers can be caught up in the moment so it’s imperative that the figure you had in mind before the Auction is the one you bid up to and including… but not over. In any transaction have the mind set that “I’m happy to buy at that level or walk away as I would not have paid any more”.
With the above in mind, you’ll be ready to bid with confidence come Auction Day. Happy Buying!