| How the Auction Works?
An Auction is the process by which all interested parties can make competitive bids to purchase a property in a transparent public forum. An Auction helps ensure you are paying the true value for the property at the time.
| You have found your dream Property now what?
- If you are interested in bidding for the property, make sure you register your interest formally with the sales consultant. That way if a pre-auction offer is made, you will also be contacted and given the opportunity to submit your best offer.
- Inspect the Property as often as you like. There are usually 3 weeks of open homes prior to the auction Day.
- Be sure to seek professional advice, inform your solicitor before the auction so they can check the Conditions of Sale and Purchase contract (COS) and Land Information Memorandum (LIM) and Certificate of Title (CT) prior to Auction. (The property consultant will provide these documents for you.)
- Arrange Finance. A sale by auction is an unconditional sale (cash sale) so it is vital that you have finance confirmed before you bid. You can speak to a recommended mortgage broker at no cost or obligation to you. You can also see your bank. Have the money ready, ensure you have 10% deposit ready as this payable upon the fall of the hammer at Auction and the balance is payable on settlement date.
- Advise the consultant if you have instructed a third party to bid on your behalf or if you need to bid remotely by telephone with permission of the vendor prior notification.
- A third party professional bidding may require written advice as to how high you wish them to go.
- Decide if you wish to get a registered valuation and or builders report, organise this with the consultant for access to the property by the professional you choose.
- You may ask to have a Variation to the auction conditions: e.g. shorter or longer settlement date, smaller deposit, access to the property prior to settlement for measuring etc. These need to be signed off and approved by the Vendor prior to you bidding.
| Understanding the Bidding Process.
- Establish a limit you wish to spend and start bidding when the figure is below or in your price range. You may come to the auction with 3 prices in mind – from grumpy price to ecstatic.
- The Auctioneer will open the bidding by asking for an opening bid and will then nominate the increments by which the bidding can be raised. For example, an opening bid is placed at $500,000 and the auctioneer nominates for the bid to be raised in increments of $10,000, meaning that the next person that bids will be offering $510,000.
- Bid clearly and promptly by raising your hand, calling out your bid- show the competition you are serious! Your agent will help you if required.
- Once the bidding reaches or is past the reserve price, the property is “on the market” and will sell to the highest bidder when the bidding stops. The reserve price is set by the client prior to auction and is established as a result of feedback from interested parties during the marketing process. It is a confidential figure.
- In the Vendor’s interests, the Auctioneer has the right to accept or reject any bids and will also set the bidding increments.
- When the Auctioneer is about to sell they will call three times and, if there are no further bids, knock the hammer down signalling the sale.
- When you succeed, you will immediately sign the contract and pay the 10% deposit to Harcourts Trust Account. As purchaser you will receive a copy of the contract and the original copies will be directed immediately to the Purchaser’s and Vendor’s solicitors.
| Can I buy before Auction Day?
In most cases you can place an unconditional offer prior to Auction Day. If the offer is at an acceptable level to the vendor, all other registered parties will be contacted and the auction will be brought forward.
Simply submit your offer in writing on the Conditions of Sale document accompanied by a 10% deposit cheque with a special clause added as follows: “The offer shall remain open for acceptance by the vendor and may not be withdrawn by the customer until 6.00pm on the second working day after the offer has been first presented to the Vendor”.
Always seek professional advice from your lawyer prior to submitting your offer, and ensure all legal documents the LIM, Title and Conditions of Sale have been checked by your lawyer.
| How do I work out the price?
The market (you) appraises a property’s attributes and then determines a price, drawing on homes you have looked at in the particular price bracket. If you need help with a price guide, ask the agent for guidance. A sales consultant will normally supply you with a list of similar homes that have sold recently in the area which compare with the Auction Home. You may also decide to get a registered valuation which you pay for. A “quote price” by the agent is usually at a level indicating where it won’t sell below, and in a good market may be indicative of the CV or better.
| What about selling my house?
Even if you haven’t sold your house prior to the auction, you may consider seeking a long settlement from the Vendors in which to sell yours. You may have up to 3 months with prior permission from the vendors to organise and get your home sold.
Talk to your consultant about whether they might have somebody “waiting” for a home like yours as an early sale might be closer than you think.
If you have cash offer on your home you are in an extremely strong position to either buy the Auction Property before the Auction or on Auction day.
If you believe your home is “saleable” you may consider talking to the Sales Consultant about these possibilities.
| Remember if you would like your home appraised or placed on the market for sale, talk to me.Pauline.firstname.lastname@example.org.
I am here to assist you with Auction Process and helping you buy “that” property!
Licensed Salesperson (REAA 2008)
Harcourts Charlton Realty
Phone: 09 6321830 Mobile : 0274 587245 email Pauline.email@example.com