Professionals Nowra Buying at auction can be a fun yet nerve-wracking experience, so it’s important to familiarise yourself with the process as much as possible before attending. Following you’ll find some helpful tips on what to expect and how to best prepare yourself.
Benefits of an auction
The auction system is a very popular method of selling property. One of the reasons for this is because it’s so transparent. The buyers making bids on the day are genuine buyers and you know that you’re buying the property at true market value. This means you’re all on a level playing field, with no one at an advantage or disadvantage. Plus, when you buy at auction, the sale is legally binding, meaning it can’t be sold out from under you if someone makes a better offer later down the track.
How to prepare for an auction
To assist you in becoming familiar with the basic auction procedure, it’s a good idea to attend as many other auctions as you can before the one where you plan to bid (click here to see our upcoming list of auctions).
You’ll need to inspect the property beforehand, and it’s a good idea to arrange all necessary reports such as pest and building inspections, strata reports etc prior to auction day.
It’s important to obtain a copy of the contract beforehand and have your solicitor or conveyancer review it. This will allow you enough time to question anything you’re unsure of. You’ll also need to contact your financial provider well in advance to ensure you have finance available if your bid is successful.
Always make sure you check the scheduled time and place for the auction, and make sure you are on time. When attending the auction do not hesitate to seek advice or information from the auctioneer or other staff.
Registering at auction
If you want to bid on a property it is law that you must be registered. If you plan to bid jointly with another person, for example a partner or spouse, then only one of you needs to register. If you’re bidding on behalf of another person or company, you still need to register, however will need to provide a letter of authority, authorising you to bid on their behalf. This also applies to telephone bids.
Registering is a simple process, and can be organised at any stage prior to the auction, such as when you inspect the property, or on auction day itself before the proceedings begin. To register you’ll need to provide your name and address and provide proof of identity. Simply bring along some personal ID such as a drivers licence, passport, personal ID card etc. If registering prior to auction day, you’ll need to provide your ID with you on the day. You’ll then be given a bidder’s number, permitting you to bid at the auction.
Bidding at auction
Bidding is one of the most exciting parts of an auction, so don’t forget to have some fun. Bid confidently and clearly, and don’t forget to register beforehand, for only registered bidders will be accepted.
When the hammer falls, the highest bidder is required to sign the Agreement for Sale on the spot and pay a deposit. This is usually ten percent of the purchase price, so remember to take your cheque book! If you do not have a cheque account, then talk to the agent beforehand to confirm what other methods will be accepted (e.g. bank cheque, building society cheque, deposit guarantee etc).
The most important thing to know is that to be the successful bidder, your bid must be the highest taken by the auctioneer, subject to any reserve price. Should the reserve price not be reached, then as the highest bidder, you will have the first opportunity to buy the property at the vendor’s reserve price.
Terminology
Reserve price: This is the price below which the vendor will not sell. This price may vary.
Passed in: This means the bidding has not reached the vendor’s reserve price, so the property has not sold.
The highest bidder will have the opportunity to negotiate with the vendor.
Vendor bid: This is a bid made on behalf of the vendor (owner) and not a buyer.
Vendor: The vendor is the owner of the property.
Current properties for auction
For a full list of our current properties for auction, click here.
For more information on auctions download our Professionals Pathways series ‘Pathway to Buying your Home‘ booklet. Or call us today on 02 4421 2644 for your free copy.