When you buy a property at auction it is important to know about the rules and the processes of an auction. Once you are the highest bidder and ‘buy’ the property you must pay a ten percent deposit and there is NO cooling off period. (no time to change your mind and pull out of the purchase).
To make the process a little easier we have outlined some general steps to follow:
Step One: Go to auctions to familiarise yourself with the process
It is a good idea to attend auctions where you are not bidding so you have some idea of what is going on.
Talk to real estate agents before you bid so you have a real indication of the value of the property you are bidding for.
However, be aware that some agents under-quote on properties so you should add at least ten percent onto the quoted price to have a realistic idea of how much the property you are hoping for is actually worth.
Step Two: Be prepared to buy
Make sure all your finances are all ready to go before the auction day. Make sure a Solicitor checks the contract beforehand and all the relevant checks, such as pest and building reports are carried out on the property. Anderson Boemi Lawyers can help you with all of these pre-purchase checks.
Decide on your maximum bidding amount and stick to it!
Step Three: Bidding
Don’t rush in with a first bid. Sometimes real estate agents and other bidders will use “dummy bidders”, which are fake bids aimed to push the price of bids up. This occurs during the ‘first phase’ of the auction.
After the ‘first phase’, the property is then declared “on the market” and you should start bidding now. Bid firmly and confidently. You can try to slow the increase if the auction by bidding in small amounts.
But remember, once you reach your limit stop bidding!
For more information on the do’s and dont’s, and the general auction process, contact our office on (02) 9653 9466 to arrange to meet with one of our team.