Your First Auction? Make It A Success!
We have a fantastic property coming up for Public Auction next month in Barney Street, so I thought I would run through a few tips about buying a property at Auction.
While attending your first auction as a potential buyer can be a little overwhelming, its also a chance to control what you want to pay for a property. But you need to do your homework before the day! There’s a lot of money riding on the result and you don’t want to be caught in an uncomfortable position because you’re not sure of the rules and procedures that govern auction day.
Here are the important things you need to be across.
Know the Rules
As a potential bidder and buyer at an auction, it’s critical that you’re well versed on the rules.
The Auctioneer will always read the terms under which the auction will be conducted, prior to taking bids, but trying to remember all of them the first time you hear them can be difficult. Talk to the HH Team before the day and make sure you’ve seen a copy of the contract. You also need to have completed any searches and inspections prior to the Auction day.
Preparing for Auction Day
You need to be aware of the implications if a property is below, or has moved past, its reserve price.
One of the most important thing is to understand the actual rules for the auction itself and the nature of whether you’re bidding for the property, or the right to negotiate below the reserve price. Once the reserve price has been reached and announced, you should understand that any bid from that point on means ownership of the property. Don’t be caught out holding back and allowing the property to be sold to someone else because you haven’t quite understood the mechanics of the decision and the language around being ‘on the market’, or ‘past reserve’, ‘for unreserved sale’, or ‘playing for keeps’, which are all terms that can be heard at an Auction.
Know the Process
If a property fails to meet its reserve price and is passed in, that doesn’t mean it won’t be sold. But if you want the first opportunity to negotiate with the agent / vendor, you need to ensure you’re the highest bidder. Remember the reserve is not disclosed to anyone except the agent on the day of Auction. This is another reason to do your homework.
Negotiating After the Property Has Been Passed In
Take this scenario: an auction starts, and the vendor’s reserve is $500,000, the auctioneer may start the bidding at $400,000. Now if two buyers fight it out and the bid gets to $490,000 and then stops, the highest bidder won’t be buying the property at that point in time. But under the guidelines the highest bidder gets the first chance to negotiate with the vendor at their reserve price. The negotiation will be handled by the agent. Should the highest bidder reject the vendor’s price after the auction, they lose the exclusive right to negotiate, and other buyers may become involved.
Do you Need to Register?
YES! Legislation regarding whether buyers are required to register before making a bid varies from state to state. But in New South Wales, you legally you need to register beforehand to be able to bid. You must show photo ID with your current residential address. You cannot bid if you haven’t registered.
You’ll Need Your Deposit
Now if you are the successful bidder, you must pay the required deposit then and there. You need to be aware of that the fact that if you are looking to bid at an auction, you have a legal obligation to pay a deposit for the home, and usually that deposit is 10% unless otherwise arranged.
Understand It’s Final
Two original copies of the Contract of Sale will be signed by the successful buyer and the vendor / agent. With the deposit paid and the contracts signed, an exchange occurs, and the property is then considered sold. There is no cooling off period. Time for a sold sticker and photo op!
Buying at Auction doesn’t have to stressful if you’ve done your homework. Come and talk to the HH team and we will walk you through the process.
Opinions are those of Meg Georkas and may not reflect those of others.
High Quality & Exceptional Service!
Peter, Ali and the team at Hutchinson & Harlow were excellent to work with. We were provided with outstanding level of professionalism and service. Hutchinson and Harlow have a good understanding of the real estate market in Armidale and surrounding regions. Their sales and marketing approach was fantastic, attracting a lot of interest and providing us with a sale at the right price quickly. Ali was brilliant to deal with. She kept us will informed, catered to our needs and made selling the house a seamless experience.
- Leah Cook (Vendor)
Reliable and Honest Agent
Peter Georkas was honest, upfront and he and his team were friendly and efficient. Selling a property is a big decision and I felt supported and included in the process at every step of the way. Peter is a warm agent who acts with integrity. I would highly recommend him and his team.
- Zeva (Vendor)
For many years we have bought and sold with Peter and the HH team..we wouldn’t consider using anyone else..
The service is professional, yet friendly..at all stages of the buying and selling processes the clients are kept up to date...
All members of the team are delightful, friendly and helpful..
We can confidently state that the HH team will be the right choice for you..
Don’t waste your time shopping around-go straight to the professional team with years of experience...you’ll be glad that you did!!
- Justin & Vanessa (Vendor)
Ali sold my investment property
Ali sold my investment property in April 2018. I would recommend Ali from H&H. H&H held regular open houses and were following up with all enquiries on the home.