The auction process can be an overwhelming experience, however being prepared with a rock solid plan of attack will help you to come out a winner on the big day.
By following these basic steps, you are well on the way to making your day at the auction a success.
Research
Research comparable properties in surrounding areas and educate yourself on where the property you are interested in should sit in the market. By doing this initial research you will know where you stand, be able to spot a bargain and it may even result in a new auction budget, higher or lower than you had originally planned.
Get Legal Advice
Whilst your agent will be acting in your best interest, it is always best to get some independent legal advice prior to the big day. This impartial advice can facilitate a smoother transaction and give you piece of mind.
Preparation = Success
Don’t forget, the winning bid at an auction results in a binding contract and if you are the winning bidder, your finances must be in order before auction day. Investigating all of your finances in advance will result in a more strategic auction budget and price guide as well as cement your confidence when bidding. You will also need to pay a deposit if you are the successful bidder which is usually 5% of the purchase price.
For professional mortgage and lending advice, talk to Ray White Nundah’s Loan finance broker Nicole Palazzi on 0439 799 966.
Don’t fly blind
Familiarise yourself with the terms and conditions of an auction and watch some of our livestream auctions in advance so that you fully understand the process.
What’s a ‘Vendor Bid’?
In Queensland, auctioneers can accept ‘vendor’ (seller) bids up to the reserve price. The property is then ‘on the market’. Vendor bids must be announced in the conditions of sale at the beginning of the auction. It is illegal for auctioneers to engage in dummy bidding or take false bids once the property is on the market. Any bid where there is no genuine bidder is a false bid. The auctioneer reserves the right to bid on behalf of, or accept, bids from owners of the property.
What is the ‘Reserve Price’?
The reserve price is the figure set by the seller of the property. It’s basically the minimum price they would accept considering the favourable auction terms. When bidding reaches the reserve price, the property is on the market and with the owner’s approval will be sold to the highest bidder. Sometimes this will be announced however the Auctioneer doesn’t have to tell you when the property reaches the reserve price.
How do I make a ‘Bid’?
All you need to do is attract the attention of the Auctioneer. How?
• Put up your hand or nod your head
• Call Out
• Ask an Agent to make the bid for you
When you make your bid, you will need to display your unique bidding number clearly. Once a bid has been made it cannot be retracted.
What if I don’t have my Finance approved?
That’s OK. The beauty of Auction is you have time to get organised. Speak to the Agent and you can be referred to the best mortgage broker (free & no obligation). A mortgage brokers role is to shop around and find you the most suitable and competitive home loan package from a variety of banks and lenders – and because they are independent you get the best deal! Once you have a pre-approval you can bid under the conditions of a cash contract.
Can I buy before Auction?
Yes. You can submit a written offer via the Agent which must be presented to the seller. You decide what price and terms are appropriate and the seller can decide whether to accept your offer. For further advice, you should discuss with the Agent.
What if the property doesn’t sell?
If the reserve price is not met at Auction, it is passed in. In this case the property will be offered for sale to all interested parties and all terms. Most properties that don’t sell at Auction only last a few days on the market after Auction.
I need to sell my house, what can I do?
You have two options – depending on your financial position your mortgage broker may be able to arrange finance before you sell. The other option is to talk to the Agent about listing your home, whilst asking the seller for a longer settlement, giving you time to attract a suitable buyer for your home as well. We’d be happy to help you sell too!