There can be some controversy as to whether an auction is a good way to buy or sell a property but if you have found a property which you are interested in purchasing and it is going to market through the auction process there are a number of things you should do both prior to the auction and on auction day to hopefully ensure success. A BRIEF HISTORY OF THE AUCTION The auction process dates back to early biblical times. Slaves were bought and sold at auction as well as women auctioned off as wives. The Romans used to auction family estates and auctions have also been popular, and in many cases continue so, for crops, livestock and tools. Auctioning is popular nowadays for sought after items such as art works and memorabilia. WHEN BUYING PROPERTY Do your market research on the value of the property you are considering. Check the property and ensure you have undertaken all the necessary structural and building surveys and inspections. Any defects or problems known prior to the sale should be disclosed in the conditions of sale documentation for the auction but make sure you check this with the sales person. Get a LIM report and read through the conditions of sale document. Check the Certificate of Title of the property Check you understand the chattels which come with the property Decide if you are going to bid or if you aren’t very confident, appoint someone who can bid for you at the auction If you aren’t familiar with the auction process it is wise to try and attend one or two other auctions before your important date so you can follow what is happening and understand what will happen Make sure you are aware of the minimum deposit you need to have available immediately on your success at the auction Understand the auction terms such as –
“On the market”, this is when the reserve price has been met and the property will be sold to the highest bidder
“Reserve Price” which is the lowest price the seller will take, once this has been reached and exceeded the property will be sold
“Passed In” which is when the property doesn’t reach the reserve price at the auction
Once you are ready to bid at the auction make sure you can clearly see the auctioneer and he can see you for your bids Be aware the auctioneer is allowed to place bids on the vendors behalf to move bidding forward to a price level acceptable to the vendor and close to the reserve price. However be aware that the auctioneer is not allowed to bid above the reserve price Make sure you know your budget and your top price and don’t get carried away by your emotions. Your top bid should be your top bid unless you have made provision otherwise Turn up at the auction knowing your game plan, having done your research, your top budget, be confident and get out there and win your new property!
