Buying at Auction
Useful tips to help those looking to purchase a property through the auction market.
Before buying at auction
When buying at auction, many of the steps leading up to the purchase are the same as making a traditional purchase, therefore, it is important that in conjunction with this fact sheet you also read Buying a Property.
Before buying at auction it is important to:
- Organise your finances before making an offer or bidding at auction. Make arrangements to cover the deposit should your offer or bid be successful, and arrange to have the appropriate mortgage funds available for settlement.
- If you are buying at auction, you will be able to inspect the contract prior to and at the auction.
- You may be required to pay your deposit and sign contracts on the day of the auction
- Always set yourself a price that you do not want to go beyond and stick to it.
- Take an objective person to the auction: buying a home at auction is fast paced and can be very emotional, therefore, it is important to take someone with you that you trust and can help you make objective decisions in the heat of the moment.
The real estate agent will be able to provide you all the information you need on how to make a bid, however, some important tips to remember are:
- Be at the auction venue early so you have time to register for the auction and settle before the auction starts.
- Once registered, you will receive a bidding card with a number on it, this allows the administrator to correctly register your bid, therefore, once the auction has started it is important to hold your number clearly in the air and use a clear voice when informing the auctioneer of your bid.
Dummy bidding is fictitious or false bidding at an auction by non-genuine bidders in the crowd, with no real intention to buy the property and without adequate disclosure of their interest.
The REIA supports legislation being put into place by most states and territories that prohibits misleading and deceptive practices such as dummy bidding.
For further clarification please see the REIA Guidelines on Auctions or contact your local Agent for the rules and regulations in your area.
This article courtesy of the Real Estate Institute of Australia