Beginners guide to buying at auction
If you’ve been considering buying property at any time in the recent past, it’s almost certain you’ve been introduced to the idea of buying via auction.
For the uninitiated the auction process can seem a little daunting, but there’s a reason they are so often recommended to both buyers and vendors – property auctions offer many advantages to both sides of the sale.
For both buyers and sellers the biggest advantage of an auction is transparency. Everybody knows the terms and conditions of sale before they start, and bidders or their representatives are on site during the auction bidding in the open.
- An auction means you know exactly who your competition is on the day.
- All buyers are given fair opportunity to buy.
- Negotiations are open for all to see.
- You know you are dealing with sellers who want to sell on the day.
- At the fall of the hammer, the auction is final and your successful bid means the property is yours with no further negotiations, and the contract is signed then and there.
What you need to do to prepare before auction:
- Have your finances organised by auction date. Know exactly what you can afford to bid. If you’re successful on the day you’ll be asked to sign the sales agreement and pay a deposit. This is normally 10% of the purchase price.
- It’s also a good idea to have your other affairs sorted by this date, such as the sale of your existing property, organising a check of the property you’re bidding on and familiarising yourself with auction documents.
- Have your solicitor inspect the property title and all legal matters related to the prospective purchase.
- Talk to your Harcourts sales consultant to gain a better insight into the local market, so you can accurately assess the market value of the property. You should also consider obtaining an independent property valuation.
- If you’re new to auctions visit a few before attending the auction of the property you wish to bid on. It will familiarise you with the process.
- Sometimes the property may be sold prior to auction day. You can submit a pre-auction offer to the property owner for their consideration – a key step of identifying your interest in the property. If you have let the sales consultant know you are interested in the property and another purchaser submits a pre-auction offer, you’ll be given the opportunity to submit your own offer.