Your guide to buy auctionat
Expert advice
At Hockingstuart, we pride ourselves on being auction experts, working with many of Victoria’s most experienced auctioneers, as well as dynamic real estate agents who know the process inside and out. Our team can work with you to optimise outcomes – turning the experience from daunting to exciting. If you see a property you like, make sure you let the agent know. They can then inform you of any developments relevant to the sale, such as offers made before the auction. If you decide that the property is not for right you, they can show you more suitable homes. You should also consider registering with early alert, our online property match system. Once registered, you will be notified whenever an appropriate property enters the market. Visit hockingstuart.com.au and follow the early alert links for more information.
Read on for expert advice about buying property at auction, including the steps involved and what you can do to achieve your property goals sooner.
Sale type is one of the most important aspects of a successful property transfer. Today, more and more Australian vendors are choosing to sell via auction to create a competitive environment amongst qualified buyers.
Double-check that your conveyancer is happy with the contract and get all changes in writing for auction day. Define your budget Know your budget to the dollar. Auctions often come down to nominal bid increases, so make sure you know your absolute limit – and stick to it. Get your finances in order If you are borrowing money, make sure you are approved to bid. A 10% deposit will be due on auction day if you are successful.
Do your research Make sure you do your homework to establish the true market value of the property. Research the sales and advertising history of the property and neighbouring properties to understand local demand. This will give you an accurate guide to what you should bid to secure the property. Speak with the agent Speak with the selling agent and other local agents to find out what is really happening with the campaign, e.g. contracts issued, registered bidders, etc. If everything checks out, let the selling agent know you are interested in bidding, so they know to look for you during the auction. Do due diligence Arrange for strata, building and pest inspections.
Preparing for auction
There is no cooling-off period for auctions –once you sign the contract, you are obliged to purchase the property.
Check the Contract of Sale
Get on the market
Come prepared Bring photo ID issued by a government or financial institution – ID must show your name and address, e.g., a driver’s licence. Bring your cheque book, pre-arrange an increase to your EFTPOS limit, or organise a bank cheque to an agreed amount so that you can pay the deposit, if successful.
Arrive with plenty of time Being rushed can make you stressed. Go to the registration desk as soon as you arrive to register and receive your bidder’s card or pre-register online before auction day.
Stand in a strategic position Stand where you can get a good view of other bidders and where you can raise your paddle in the auctioneer’s line of sight. Be positive Even if you prefer not to compete at an auction, look on the bright side. Unlike private treaty negotiations, you will know what price your competitors are willing to offer. Don’t be put off by other bidders – it’s a great sign that other people also think it’s a great property.
On the day of the auction
Know your strategy If the property is going to pass in, make sure you are the highest or last bidder. The highest bidder has the first right of refusal to purchase immediately after the auction. If no one bids, be prepared for a quasi-auction of interested buyers. Remember, just because you made the highest bid doesn’t mean you are the only contender – don’t be unnecessarily tough during the negotiation.
Don’t assume anything If you are the sole registered bidder, don’t assume you’re the only interested buyer. Other buyers might not compete on the day due to delays with finance or timing challenges; however, their circumstances could change within days. Show confidence Bid in a loud and clear voice, and be mindful of your body language. Stand up straight and raise your bidder’s card high. If you start the bidding quickly and with conviction, the owners and other buyers will see you as a contender.
The vendor will have a price in mind that they want to achieve. This is called the reserve price. Often, the auctioneer will make a single bid on behalf of the seller, known as the ‘vendor bid’ – this can start an auction or raise the bidding to a level closer to the reserve price. The auctioneer will announce when the reserve price has been reached and the property is on the market. This is typically when the bidding heats up. Be aware Be aware of your competition’s body language and behaviour. Look for cues, e.g., they may have reached their ceiling if they huddle with their support team. If they subsequently place a bid with a slight increase, immediately go a little bit higher – keeping in mind your ceiling price.
At Hockingstuart, we pride ourselves on being auction experts, working with many of Victoria’s most experienced auctioneers, as well as dynamic real estate agents who know the process inside and out.
You will be required to pay 10% of the sale price as a deposit, which the agent will hold in a trust account. This can be done via cheque or EFTPOS – if paying by EFTPOS, make sure you have an appropriate limit to cover the deposit amount.
Both you and the vendor will be asked to sign the Contract of Sale after the auction. Make sure the details are correct – things can be overlooked in the buzz of auction day. The signed contracts will then be exchanged to formalise the agreement. Pay the deposit
Prepare for settlement
Unconditional offers are typically most attractive. You should allow the vendor time to decide by stipulating that the offer will remain open for at least 48 hours. If the vendor is considering your offer, they may instruct their agent to seek offers from other interested buyers. All offers will be treated independently and confidentially and the agent will provide advice and assistance to all parties involved.
If the vendor accepts your offer, you will exchange signed contracts and complete the purchase. Please note: you should always seek legal advice before entering into any contractual agreement.
Double-check the Contract of Sale
You are welcome to make an offer to purchase a property at any time leading up to the auction. In most cases, offers must be in writing and include a 10% deposit.
The Contract of Sale will typically outline a settlement day. Settlement is the conclusion of the sale transaction and usually takes place six weeks after contracts are exchanged. All documentation will be forwarded to your nominated legal representative, and all parties will continue to liaise until settlement.
After Makingauctionthean offer outside of auction
Our team can work with you to optimise outcomes – turning the experience from daunting to exciting. Experience the Hockingstuart difference.
Contact your local Hockingstuart office today for advice and support you can trust. hockingstuart.com
