BUYING AT AUCTION - A Brief Overview of the Process.

Careful preparation is important if you want to feel comfortable and in control when buying by way of auction. Remember, at auction if the reserve has been reached and you are the highest bidder at the auction, you have purchased the property. There is no going back, so gather all the information you need. Here’s a checklist to help you do your homework.

1. Look, Look and Look Again:

You can inspect the property as many times as you like prior to the auction by making an appointment with myself or visiting at open home times. This is also the time to arrange inspections with builders, plumbers, or any other specialists, to give you confidence about the property.

2. Get To Know The Market:

You won’t know the reserve price of the property you will be bidding for, but, you can make an educated guess. Research  the market as closely as you can. When you visit the property you should receive an information pack with a range of recent sales to aid you in this  matter. Also, drive aroung the area and make comparisons with other properties.

3. Arrange Finance

Properties sold by auction are always unconditional, so it’s vital that you bid at the auction so you don't miss out. To avoid last minute pressure it’s best to arrange your finance well before auction day.

4. Get Your Solicitor On The Job

I recommend that you seek legal advice. Have your solicitor inspect the title of the property and investigate all the legal matters relating to your purchase. If you are not confident you might wish to have a legal representative at the auction.

5. Check Auction Documents

Make sure you are familiar with all the details and conditions of sale prior to auction, such as the deposit, possession date and the balance of payment details. Read and understand what will be sold with the properties (eg; soft furnishings, light fittings, appliances and any other chattels) - you don’t want any surprises on auction day. You may wish to get your solicitor to review these documents prior to the auction.

6. Attend Another Auction

If you really want a better understanding of how an auction is conducted you may even consider attending another auction just to familiarise yourself with the   auction process.

THE AUCTION -  THE BIG DAY

Before the Bidding Begins:

This is the last opportunity to ask any questions. If you have any information that you need to know don’t be shy, talk to myself about any of the concerns that you have.

Take a few minutes to get to know the surroundings, it’s important to feel at ease.

The Auction Commences:

I will always begin with the terms and conditions of the auction sale and legal description of the property prior to a brief description of the property, then the bidding will begin.

Reserve Price

Most auctions are held “subject to a reserve price” which means that the owner has    nominated a price below which the property may not be sold, even though you might have made a bid. Most auctioneers will announce that the reserve has been reached and the property is now for sale at some point prior to "knocking it down" (selling it).

Once the reserve is passed the property will be sold.

Making A Bid

To make a bid, you simply have to make a gesture that can be plainly seen by the     auctioneer. You can nod your head, raise your hand, call out or invent your own signal. Be aware that any bid you make could be the bid that buys the property. No bid once made can be retracted.

Passed In

This is the term used when a property fails to reach the reserve price. In this situation the highest bidder usually has the first opportunity to purchase the property at the vendors reserve price so it is vital that if you are at the auction to bid and buy you get in the position as the highest bidder.

After The Auction

The successful bidder will be asked to sign the sale agreement and pay a deposit,      usually 10% of the purchase price. The purchaser will receive a copy of the agreement and would then make arrangements to complete the sale on  settlement date.

When you buy at an auction it can be a very exciting process. Don't forget to enjoy the moment and savour the experience.

Congratulations!!!

Cheers

Nick Boyes

Auctioneer and Marketing Consultant.