The auction process may seem daunting, but it has many advantages:
So you’ve found a property you like and it’s up for auction, where do you start?
Get your ducks in a row – First and foremost, you must have your finances organised by the auction date so you’re ready to sign the contract if your bid is successful. At auction you will need to have up to 10% of the purchase price ready to go at the fall of the hammer.
Check it out – Inspect the property as many times as necessary and, if you have any doubts, arrange for a builder, plumber, electrician or any other tradesperson to accompany you. Later on, you’ll want to engage the services of a professional to inspect the building’s structure and for pests, again, this must be done before auction day.
Do your research – Talk to your Harcourts sales consultant about the local market and have a look at recent sales in the neighbourhood to try and assess the market value of the property. Consider getting an independent valuation.
Read and review – Check the auction documents. Make sure you’re familiar with and understand all the details and conditions of sale (the deposit, possession date, balance of payment, list of chattels, etc). You don’t want any unexpected surprises come auction day.
Gain legal advice – Have your solicitor inspect the title to the property and investigate all legal matters related to the purchase.
This is your last opportunity to ask questions before the bidding begins.
The auctioneer will begin by reading the terms and conditions, then talk generally about the property before asking for an opening bid.
Most auctions are held "subject to a reserve price" – the price below which a property may not be sold. When this level has been reached, the auctioneer will then announce that the property is for sale.
Making a bid simply invoices making any gesture to attract the attention of the auctioneer. Be aware that any bid you make over the reserve price could be the one that buys the property.
‘Passed in’ is the term used when a property fails to reach the reserve price and negotiations between the highest bidder and the vendor do not result in a sale.
After being passed in, the property will now be open to the market, and everyone will have equal opportunity to submit their offer.
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.