Why buy at auction?
There are lots of benefits to buying at auction, but there are also some risks you should take care to mitigate.
Depending on the bidders in attendance, you could get your home at a good price, sometimes well below market value. Auctions have a reserve price, which is the minimum value the owner would like to achieve on auction day, but even if the bidding doesn’t reach the reserve, you can often still negotiate a deal with the agent.
The risk with auctions is that if your bid is successful, you are committed to buy – there is no cooling off period. That’s why you should always prepare properly to make sure you’re 100% happy with the home you’re bidding on.
How you should prepare beforehand
Before the auction, thoroughly check the following:
- The contract of sale
- The Title documents
- The zoning of the property
- Any mortgages or other arrangements currently affecting the property
- Details of any statutory proposals that might affect the property
- Council permits for any past changes to the property
- The sewerage diagram
- Annual costs like water and council rates
- Our team can help you access and assess this information.
You also need to get your home loan pre-approved. If you don’t have this sorted out before the auction, the auctioneer may not accept your bid.
What happens if your bid is successful?
If you make the winning bid, you will sign a contract and pay a deposit (usually around 10% of the sale price). This can be negotiated, but make sure you speak to the auctioneer about this before the auction starts.
A bank cheque or cash is the normal way to pay the deposit, although a personal cheque is sometimes acceptable. If you have equity in your current home, we can show you how to use that to raise the deposit or arrange a deposit bond.
We place huge emphasis on educating our clients, so that they can be personally confident in their decision.
Let us keep you updated with the latest information so you can reach your goals faster.