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BUYING AT AUCTION
Prior to the auction:
Research the local market
Visit as many similar open homes as possible and follow up regarding sale price. Ask your salesperson for stats of similar properties in the same area. An independent valuation can be helpful too.
Don’t get too tied up on the CV of the property
Market value will always be market value regardless of what statistical value the council put on each property. Most local property sells at a percentage above CV but a small amount still sells below.
Attend as many auctions as possible
Gain a good understanding of how they are conducted and get to experience the different auctioneering styles.Visit the property as many times as you feel necessary. It’s also worthwhile getting it checked out by a specialist too. You simply must be happy with the property you are about to bid on.
Have your finance arranged
A purchase at auction is unconditional and binding. If you are the successful bidder, you will be required to pay a deposit (usually 10%). Familiarise yourself with the all the conditions of sale including deposit required, settlement date and payment of the balance of the purchase price. Also understand what chattels will be included in the sale. It’s also a good idea to have your solicitor to check all legal matters relating to the property.
At the auction:
Give yourself time to ask any last minute questions and to make yourself comfortable with your surroundings. Focus on your goal of owning the property at the price you want to pay.
Don’t be put off by a large crowd
There is likely only to be a small number who are actually serious bidders. If there are a large number of bidders for a particular property, this should give you the confidence that this home ticks a lot of boxes. If you are the successful bidder, you are likely to experience a similar frenzy when you come to sell.
After reading the basic terms and conditions the auctioneer will ask for the opening bid. A reserve price will already have been nominated by the owner and if the property fails to reach the reserve price, the property will be ‘passed in’. The highest bidder will generally have the first opportunity to negotiate with the vendor directly after the auction. (An auctioneer may bid on behalf of a vendor but must make it clear they are doing so. They will always bid below the reserve price).
Bid with confidence
Bid with confidence, know your limit but have an open mind. If you are the successful bidder you will be required to sign a contract and pay the deposit. Arrangements will be made for settlement date on which the balance will be due.
Custom believes that an onsite auction is the best environment for everyone. For the seller, the whole spotlight of the day is only on one property: theirs. For the buyer, you are able to walk around and experience the property one more time before bidding to buy.
Click here for a downloadable pdf or contact us for further details.