Are you prepared to buy at auction?
By First National Real Estate
There is nothing quite like the atmosphere of an auction: the air thick with anticipation and competitive spirit, the eagerly gathered crowd and the life changing possibilities if your bid is accepted.
Thousands of auctions happen across the country every week and much of their popularity is surely to do with the transparency and accessibility of the process to the public. Auctions offer a clear and secure process for homeowners and buyers to navigate the sale or purchase of a property. The auction process also allows the marketplace to decide property values and gives everyone a fair chance at snapping up their dream home.
Prospective buyers should research the property before auction, arranging any necessary building inspections, pest inspections or conveyancing. Familiarise yourself with the contract of sale and make sure you have asked any questions to clear up things you’re unsure about. It goes without saying that you should be sure you have, or will have, access to the finance for the property if your bid is accepted and you will need to be able to pay the deposit on the day. Working through all these points will help confirm your decision about whether to bid on the property or not, on auction day.
It's a good idea to try to arrive a little early on auction day, for a few reasons. It gives you time to view the property once more and speak to the agent to make them aware of your intent to bid. Once you’ve done this, you’ll be able to find yourself a good position, ideally standing within the agent’s line of vision. When you bid, speak loudly and confidently so you can be heard and to let the competition know you’re serious. Buyers with doubts will soon fall out of the bidding war if they know you’re on a mission to buy.
Competition usually intensifies when the auctioneer announces ‘the property is on the market’. This means bidding has now exceeded the vendor’s reserve price and the property will be sold to the highest bidder. If you are the last person with their hand in the air, congratulations! Get ready to handover your deposit, sign the contract and crack open a bottle of champagne because you now own a house!
Sounds pretty straightforward right? Preparation is key as is maintaining a calm demeanour. Remember not to let your emotions get the better of you - know your budget and bid to the level you are comfortable with. Your goal is to be the highest bidder - even if the bidding fails to achieve the reserve price, you’re still in with a chance as the highest bidder is usually offered the opportunity to negotiate at this point. As mentioned earlier, make sure you’ve conducted all necessary research about the property and you can afford to pay for it. There is no cooling off period for purchases at auction.