Arrowtown

The 5-Step Plan to Buying at an Auction

Anyone planning to buy at auction must be prepared well before the property goes under the hammer. Remember, there is no cooling-off period when you buy at auction, so you have to be 100 per cent certain that this is the property for you before bidding.

To increase your chances of auction-day success, follow these five steps...

1. DO YOUR RESEARCH
Once you have found a suitable property and monitored sales in the area, start attending auctions where similar properties are being sold. This will give you a realistic understanding of the auction process, where the key points are bidding with confidence and sticking to your limit.

2. SEEK EXPERT ADVICE
• Check the contract: Your solicitor must examine the Auction Agreement prior to the auction so you can be confident that everything is in order.
• Check the building: All building inspections, Land Information Report (LIM) should be undertaken prior to auction day so you know that you aren’t buying into a money pit.
• Know your buying power: Your finances must be in order prior to auction so you know exactly how much you can spend. Go to your bank and get all your financials in place.

3. REGISTER TO BID
You are not required to be a registered bidder, however, if you do register with the company, the agent will be able to keep you informed of progress during the pre auction marketing period.

4. BE READY ON THE DAY
Arrive at the auction room (or on site) early, with your cheque book in hand. Position yourself so you are close to the auctioneer and can watch other bidders. When you are ready to bid, do so with confidence and don’t go over your budget – keep in mind that there will be other properties to choose from.

5. ENTER THE HOME STRETCH
• Meeting with success: Putting in a successful bid to buy a property means that you will be required to sign a contract and pay your deposit immediately, which is usually 10 per cent of the purchase price. The balance of the purchase price will be paid on settlement.

The alternative: If you really want a property but don’t want to bid at the auction, you can make a pre-auction offer through the selling agent. Some vendors will prefer to see the auction through but others may be willing to negotiate.