Purchasing a property is a big decision and can often be quite daunting. Auctions play a major role in how properties are sold in Australia so it is important to feel comfortable about bidding at auction. If you don’t feel confident in bidding, your agent or perhaps a friend or relative can convey these bids for you as long as the relevant paperwork has been completed prior to the auction starting. Here are some tips that will help you in determining a bidding strategy
1. Don’t Strategise too much: We conduct approximately thousands of property auctions each year and can tell you that each one is different. Don’t get caught up in worrying about what will happen or how the bidding will unfold. Focus on what you are there to do and that is purchase a property. Be the first person to bid. Our experience shows us approximately 70% of people who open the bidding, buy the property.
2. Bid with confidence: Many buyers sit back and wait. They want to get a feel for what is about to unfold. More often than not, it is the bidder that bids with confidence and without hesitation that walks away with the keys to their new home. If someone bids, come straight in with another bid. You have nothing to lose and everything to gain. Show your competition that you want the property at any cost. Set the pace don’t chase the pace.
3. Set yourself a base limit: If you are going to set yourself a limit make sure that limit has flexibility. As strange as that may sound, too many times I have seen bidders miss out on their dream home for $1k or $10k when the other bidder is at their limit also. In a very short time you will be happy for going that little bit extra
4. Don’t forget your Identification: It is a requirement by law that you register for all auctions in QLD. The easiest way to register is with a driver’s license. If you don’t have ID then you cannot register, so don’t forget. To save time on auction day there is the option to register prior to the day. Contact your agent for more details.
5. What happens if a property is passed in: Most auctions we facilitate have conditional buyers (buyers that can’t bid under auction terms and conditions) waiting hoping that the property passes in. Should the property pass in, everyone will have equal opportunity to submit their offer. If you can bid under auction terms and conditions, give it your best shot at the auction as it is the most transparent way to buy and in most cases, less competition.
6. What is a vendor bid: In QLD the auctioneer is allowed to make 1 or more bids up to but not including the reserve price on behalf of the vendor. A vendor bid must be disclosed by the auctioneer. It is not the reserve price and does not indicate a price at which the vendor will accept. A vendor or seller bid is used in different circumstances to either start the bidding, increase the bid to a level closer to what the vendors will accept or position a property at a price at which the vendor will take bids nothing less than.
7. Why might an agent or auctioneer ask you to increase your own bid: This is a common occurrence in today’s market so don’t feel uncomfortable about it. At some point in the auction, the estate agent or auctioneer may come up to you and ask you to increase your own bid. This may occur as your current bid may not be at a price at which the vendor will accept. Therefore you may need to increase your own bid if you wish to purchase the property.
Q. What is a Real Estate Auction?
A. Auction is a form of marketing a property through intensive advertising mediums designed to capture the maximum attention of Buyers within a set time frame. The process is the purchasing of Real Estate through public bidding / negotiations to determine the true market value of the Property.
Q. What is the Reserve Price?
A. The Reserve Price is usually set on the day of the Auction by the Seller. The Real Estate salesperson is unaware of the reserve. The only person who will know is the Auctioneer and Seller.
Q. How do we bid at the Auction?
A. Simply attract the attention of the Auctioneer by:
1. Putting up your hand or number identifier
2. By calling out
3. Nodding your head when catching the Auctioneer’s eye
The Auctioneer usually nominates the amount of the bid he is looking for. If you are the successful buyer, you will be asked to pay the deposit and sign the contract.
Q. Can I buy before Auction?
A. Yes, in most cases you can. Unless the Sellers instructs the Real Estate agent to sell only under the hammer at Auction on Auction day.
Q. What Conditions are deleted from the contract?
A. Most contracts will have deleted Conditions 3 and 4 from the contract the finance & building inspection clauses. The Cooling Off Period has also been deleted giving the Seller an un-conditional contract.
Q. I want to buy, but I have a house to sell?
A. There are two answers. If you are in a sound financial position you may organise a bridging loan. The other way is to buy on a longer settlement date, giving you time to sell and settle your own home.
Q. I can’t buy at Auction because I have to get finance?
A. That’s Ok. You can organise, through your Bank or Building society, approval to bid up to a price that you are prepared to pay. This offer would be subject to the Bank’s valuation. This is simple to organise and only takes a couple of days before auction.
Q. What price do I have to pay to buy the Property?
A. This is the price You are prepared to pay. Other Buyers will perceive different amounts.
Q. What if the house doesn’t sell?
A. If you are an under bidder or if you have an interest in purchasing the property on terms and conditions other than those under Auction, please do not leave the Auction until you have ascertained whether or not the property has in fact been sold.
Q. How much deposit do I have to pay?
A. If the property is sold to you as the highest bidder at auction you will have to pay between 5% and 10% of the purchase price to the nominated stakeholder on the contract. If the property is sold to you before auction you still pay the 5% to 10% deposit.
Q. When do I move in to the new property?
A. Normally within 30 days from sale date, unless stated on the contract.
Q. Do I need To Register To Bid?
A. Yes, Under the new Queensland Government Act ALL bidders MUST register showing photo ID and providing name, address and contact numbers when registering.