Top 15 Tips for Buying at Auction
Tip 1 | Tip 2 | Tip 3 | Tip 4 | Tip 5 | Tip 6 | Tip 7 | Tip 8 | Tip 9 | Tip 10 | Tip 11 | Tip 12 | Tip 13 | Tip 14 | Tip 15
Tip 1 – The Sale is Legally Binding
It is important to remember that when you buy
a property at Auction you are not entitled to
any Cooling Off Period, the sale is legally
binding.
Tip 2 - Finance
Ensure that you have your Finance in
place prior to the Auction. Your financier can
supply you with a letter stating you are approved
for a certain amount. This guarantees you know
your bidding limit. Make sure you allow for
all extra legal costs involved. eg. Stamp duty
and conveyancing.
Tip 3 - Do Your Research
Regardless of whether you are buying at auction,
it is imperative to do your homework and research
prices, then when it comes to bidding, you know
exactly what you are bidding for. Contact us
for a Sales History
Report on the street you are thinking about.
Tip 4 - Inspections
Once the Auction is finished there is no opportunity
to get building or pest inspections done. Make
sure that any reports or inspections have been
carried out to your satisfaction before you
attend the Auction.
Tip 5 - Work Out Your Bidding Limit
It is important that you set your own bidding
limit. Decide what the property is worth to
you based on what you can afford. To make sure
you can afford a property work out the limit
on your loan and add 3% to the interest rate.
If you could still make the payment then that
is a very safe limit.
It is important not to be drawn into a bidding
war on a property you want. Emotion can lead
to you paying more than you can afford and there
is no cooling off period with an Auction.
Tip 6 - Please Attend Other Auctions
It pays to attend as many auctions as possible
before you start bidding. Take mental notes
on how people bid and work out a style that
will suit you. You never know when one of these
bidders might be at the auction of the property
you want to buy!
Tip 7 - Register Your Intent
Once you have inspected a property if you are
interested it is important to let the Agent
know. They will ensure you will be advised if
there are offers made by another party prior
to the Auction Day.
Tip 8 - A Deposit is Required
When the property is sold at the Auction you
are required to sign the Contract of Sale and
pay a deposit of usually 10% on the spot. This
can be paid by Personal or Bank Cheque.
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Tip 9 - Set an Uneven
Limit
Wherever possible, it pays to set an uneven
limit, rather than stopping on a round number.
For example, rather than stopping at 560,000,
try going to 561,000. A smaller $500 bid could
make the difference if the other bidder is close
to their limit.
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Tip 10 - We are Here
to Help, Please ask
Do not be afraid to ask a friend, relative or
real estate agent, to assist you with your bidding.
Many people ask someone else to bid on their
behalf as they may be less inclined to bid emotionally
and will not exceed a predetermined limit.
An adviser's experience can be an important
asset on auction day. However, if they are going
to bid for you, you need to make sure that they
have very clear instructions in writing on what
they can and can't do on your behalf.
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Tip 11 - Dress to
Impress and for Success
It never does any harm to dress for the event.
If you look like an affluent, confident property
buyer, this will help convince your competition
that you won't stop until the property is yours.
Remember that it isn't always the person with
the most money that wins at auction. It is the
person who convinces everyone else to stop bidding.
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Tip 12 - Check out
the Paperwork Prior to Auction
If you are seriously interested in a property
and intend to bid you should have your Solicitor
inspect the Contract of Sale. It is a good idea
to have a good read through all the paperwork
related to the auction beforehand. Wherever
possible, contact the agent handling the sale
and ask them to provide you with a copy of the
documentation.
This is normally possible in the week prior
to auction. Read through all of the documents
and always ask if you are unsure of anything.
It is important to clarify details such as settlement
terms, deposit and fixtures before the auction
commences, (not after it has been knocked down
to you)!
On the Auction Day you should always check that
your copy of the Contract of Sale is exactly
the same as the original Auction Contract and
that there have been no late changes.
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Tip 13 - Be Visible
Remember how an auction looks from the auctioneer's
perspective. They are often looking at a large
number of people who are invariably turning
around, whispering, brushing away flies, shielding
their eyes, etc.
If you are standing at the back of this scene,
or hidden in the shade of a tree, the auctioneer
may well miss your bid, particularly when you
are bidding for the first time. Stand in clear
sight of the auctioneer and make your first
bid is obvious to them.
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Tip 14 - Be Clear
and firm on Your Bidding
Make sure the auctioneer understands what you
are doing. Bid early, clearly and confidently,
and avoid unusual sign language that may be
misunderstood.
Buyers are usually reluctant to start bidding
at Auction but the best policy is to bid loudly
and confidently signaling to all other bidders
you intend to purchase the property or should
the Reserve Price not be reached that you are
given an opportunity in any further negotiations.
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Tip 15 - Be in Control
If the bidding is increasing in larger denominations
than you are comfortable with, consider offering
a lower denomination as your bid. The auctioneer
does have the right to refuse it, but there
is absolutely no harm in trying.
On the other hand, don't be afraid to try and
increase the bidding with a "knock out"
bid if your competition is showing signs of
slowing down. This can often throw doubt into
the mind of the other bidders and get them to
stop even though they have not yet reached their
limit.
