ADVANTAGES OF BUYING AT AUCTION
It may seem difficult, or even daunting, but there are many advantages of purchasing at auction. When the buyer and seller meet, and a conclusive sale eventuates, true market value for that property will have been established. It’s a proven system of success.
Make the Time to Get Things Right
Once you have identified an auction property that you are interested in:
- Inform your Real Estate Agent that you are interested in a particular property so that they may register you against the property. There is no obligation to attend the auction by being registered, it just means that if another purchaser submits an offer prior to the auction, you will be contacted and given the opportunity of submitting your own offer.
- Do your market research on sales of similar properties in the area. Ask me for some guidance and I will do my best to refer you to similar homes currently on the market or have just sold. You can also arrange a registered valuation.
- Arrange finance, organise a property inspection if need be, and familarise yourself with all the auction documents. It is recommended to get your Solicitor to inspect the title of the property and investigate all legal matters relating to your prospective purchase.
- Find out what the market value is of your existing property if you need to sell. I can help you with this. You may be able to extend the settlement date by several weeks after the auction day to give you time to sell your property (this needs to be agreed between Seller and Purchaser prior to auction day). We have many buyers who may be looking for a home just like yours.
- Arrange your finance as sales by auction are unconditional, so it’s vital to have your finance confirmed before you bid. Your bank or lending institution can help you establish what your top bidding price would be. Talk to me if you need to be introduced to a Mortgage Advisor.
- Anyone can bid on your behalf – Lawyer, Real Estate Agent, friend or family member. They will require written authority and advice of the top bid you wish to go too. We can arrange this prior to the auction as the seller must also be in agreeance. If you are feeling nervous, tell me. Harcourts’ offers a free Auction Buyer Information session run each Thursday from 5.00pm to 5.30pm which is very informative. See me for more details.
Key points for bidders
- When you bid at auction, you are bidding unconditionally so you must have completed all your due diligence prior to auction date. It is recommended to send the Sale by Auction document along with the LIM and Certificate of Title to your Lawyer to check.
- A 10% deposit is required within 24 hours of the auction. This can be paid by cheque, bank transfer or electronically.
- Settlement date other than what is stated on the Sale by Auction document must be agreed prior to the auction.
- Chattels included and excluded are recorded in the Sale by Auction document so please familarise yourself with these
- GST does not generally apply to residential property.
On Auction day
- It’s your last opportunity to ask questions before the bidding begins.
- The Auctioneer will begin by reading the terms and conditions then talk generally about the property.
- Most auctions are held ‘subject to a reserve price’ – the price below which a property may not be sold. When this level has been reached, the auctioneer will then announce that the property is for sale.
- Making a bid simply involves making any gesture to attract the attention of the auctioneer. Be aware that any bid you do make over the reserve price could be the one that buys the property.
- ‘Passed in’ is the term used when a property fails to reach the reserve price. The highest bidder then usually has the first opportunity to negotiate with the seller or their agent.
- If you are successful on the day you will be asked to sign the sales agreement and pay a deposit (payable within 24hrs) which is normally 10% of the purchase price.
Information Evening every Thursday
To help you become familiar with the Auction process, Harcourts run information sessions designed to increase awareness and understanding of the auction process from a Buyers perspective. Topics covered is an overview of the auction contract, benefits of bidding at an auction, bidding strategies, plus much more.
I would be more than happy to accompany you if you would like to attend. Held Thursday nights in our Takapuna office, corner Hurstmere Road and Anzac Avenue at 5.30pm to 6.15pm.
I am committed to making the process as easy, stress free and as pleasant as possible whilst listening to your every need.
Call me now 027-4433707 or email me email@example.com