The guide to bidding and buying at auction complete
How to be a success on auction day
ADVICE FROM OUR AUCTIONEER
So it’s finally auction day. How do you give yourself the best chance at casting the winning bid?
Well, first make sure you are registered as a bidder. You can do this prior to the auction on the day or in the weeks leading up, we recommend you give yourself some time for a more relaxed experience. Make sure you have your driver’s licence or passport on you when going to register. The agent running the auction will be able to provide you with the registration form.
Another thing to consider is how you will pay the deposit should you secure the winning bid. Confer with your bank beforehand if you intend to bank transfer as you may have a limit in place.
Now that you’re registered and know how you will pay, double check your bidder number and paddle are matching and you’re ready to begin! It’s time to get the auction underway. Now don’t be afraid to bid confidently, that is what you’re here for. In fact, the opening bidder is often the successful purchaser. By opening you are putting your stamp on the auction and showing your competitors that you are serious about getting this property!
Throughout the auction, the auctioneer or agent might ask you to increase your bid; this is normal in todays’ market and can put you in a stronger position to negogiate. Remember, you and the others around you are
getting the exclusive opportunirty to purchase the property under auction conditions, as opossed to competing with other conditional buyers if the property is passed in. This is your best chance to buy!
Keep in mind the sellers have invested a lot into making this auction happen; the campaign, the presentation of their home, their agent, so you know they are genuine about selling. If they weren’t they certainly wouldn’t have chosen the auction route. They are looking for a buyer today, so get bidding!
Auction Preperation Checklist
Finance - have pre-approval and know your bidding power
Meet agent - organise a chat with the agent to discuss the auction and register
Register - you must be registered as a bidder prior to auction
Did you know...
UP TO
of opening bidders on the day end up being the successful purchaser
68%
The auction process explained
THE WHY AND WHAT OF AUCTIONS
Auction can be the best way to market a property. It is a transparent process for the market, buyers and sellers; all parties have access to the bidding which allows for total clarity in offers and negogation.
Essentially, a property that is up for auction is marketed without a price guide, buyers who are interested inspect the property and prepare themselves for auction day without the restrictions of specific pricing. The date, time and terms of the auction are decided by the sellers. Buyers are encouraged to do their due diligence as early as possible so they can be prepared to secure the property on the day.
The basis for auction is letting the market declare where they see value in the property. Often times it enables buyers to compete for where they see value - this is especially true for properties with unique features.
During the auction itself, the property will be declared ‘on the market’ once the reserve price has been reached or exceeded in bidding. This price will not be revealed prior.At this point, both buyers and sellers can be confident that it will sell to the highest bidder with no further conditions and an exact settlement date.
AUCTION DETAILS decided by seller time terms of settlemtent date
Letting the market declare VALUE WITHOUT A PRICE GUIDE
WHEN THE AUCTIONEER ANNOUNCES:
“On the Market!” the reserve has been met or exceeded.
buyers are encouraged to do their Due Diligence prior to the auction
Glossary of terms
AUCTION BID - To purchase
EASEMENT - An easement is a section of land registered on your property title, which gives someone the right to use the land for a land owner. An example is a shared driveway
CHATTEL - An item of property other than freehold land, including tangible goods. Included chattels may be items that remain with the property that would or dinarily be presumed to be being removed prior to settlement eg: pool table, television etc.
CONDITIONAL INTEREST - If you hear the auctioneer mention conditional interest, they are most likely referring to those buyers that are unable to purchase under auction have completed all due diligence) but are after the auction if the property is passed in. The conditions they might wish to work with subject to a building and pest inspection, etc.
SETTLEMENT - Stage of a property sale wherein the buyer completes payment of the contract price to the vendor and takes legal possession of the property.
‘ON THE MARKET’ - A property is announced on the market and deemed to pass title to the highest bidder when either the reserve price is reached, the bidding ceases at or above the reserve price or the vendor reduces the asking price in order to meet the market’s value expectations and secure a sale.settlement eg: pool table, television etc.
The “settlement period” is the amount of time between the exchange of contracts and the property settlement.
The settlement date is the date where keys change hands.
VENDOR BID - A vendor is the owner of the property for sale and a bid piece of real estate. So a vendor bid can be made by the auctioneer on behalf of the vendor and is used to start the process if no one in the auction has raised their hand with an amount.
UNCONDITIONAL CONTRACT - After the seller has received the full deposit and all other conditions of the contract have been satisfied or met, the contract of sale will become unconditional. Once this occurs, there is now a legally binding document in place and all parties, buyer and seller, will be legally bound by the contract.their hand with an amount. At auction, a property is typically offered with no conditions meaning it is a fair playing field for all involved in bidding for the property. This can often mean that finance and any building or pest inspections must be organised prior to the auction date.
Conditions of Auction - QLD
1. All Bidders must be registered. The Auctioneer may register a person as a Bidder only if the person has provided his/her name and address and satisfactory evidence of his/her identity. If the Bidder is successful, the name listed on the registration form will be the name of the Buyer in the Contract of Sale, unless the Bidder is bidding on behalf of another person in accordance with Conditions 9 and 10.
2. The highest approved bidder will be the buyer subject to: a. The reserve price; and b. The seller’s approval
3. A cooling off period will not apply to any Contract of Sale formed on a sale by auction or entered into, by no later than 5.00pm on the second clear business day after the property was passed in on auction, with a registered bidder for the auction.
4. The Buyer acknowledges that the Contract of Sale will not be conditional on any of the following: a. Finance b. Building and Pest Inspection Reports
5. Bids will only be accepted from registered bidders.
6. Bidders must use the numbered identifier provided by the Auctioneer to make a bid during the auction.
7. The Seller reserves the right to bid, either personally or by a representative. If the seller or their representative bids for the property the Auctioneer must clearly announce to all the other Bidders that the bid is made on behalf of the Seller.
9. Any person bidding on behalf of another person must provide the Auctioneer with a copy of their written authority before the auction; otherwise the Bidder will be taken to be acting on their own behalf. The Auctioneer may register a person as a Bidder only if the person gives the Auctioneer the name and address of the other person who for whom bids are intended to be made on instructions given by the other person by telephone.
10. If the Bidder is authorised to bid on behalf of another person, and is the Buyer in accordance to condition 2, the Bidder warrants the other person’s ability to enter and complete the Contract of Sale in accordance with its terms.
11. The Auctioneer has the discretion to refuse to ccept any bid from any person. A bid will be taken to be accepted and irrevocable unless the auctioneer refuses it. If the Auctioneer refuses a bid, the Auctioneer must announce to all the other Bidders that the bid has been refused.
12. Without affecting condition 11, if there is any dispute over a bid or the result, the Auctioneer may: a. re-open the bidding; and or/ b. determine the dispute in any other way the Auctioneer considers appropriate in his/her absolute discreation.
13. Immediately on the fall of the hammer, the Bidder of the highest bid accepted in accordance with condition 2, must sign, as Buyer, the Contract of Sale in the form displayed or circulated with these Conditions of Sale and pay the deposit to the nominated Deposit Holder.
8. The Bidder warrants their ability to enter and complete the Contract of Sale in accordance with its terms.
14. The deposit payable under the Contract of Sale is 10% of the successful bid or any other percentage or figure nominated in the Contract of Sale.
15. The Seller and the Buyer agree to sign all documents and do everything else necessary to transfer the property to the Buyer. The Seller and the Buyer each appoint the Auctioneer their agent to sign the Contract of Sale on their behalf. This appointment is nonrevocable.
16. If the buyer does not pay the deposit, at the Seller’s option:
a. The result of the auction will be treated as invalid and the property may be resubmitted to public auction at the risk and expense of that Buyer; or
b. The Seller may affirm the Contract for Sale and pursue their legal and other remedies against the Buyer as they see fit.
17. The decision of the Auctioneer is final in all matters relating to the auction
18. The Bidder consents to the use of electronic communication in accordance with the provisions set out in Chapter 2 of the Electronic Transactions (Queensland) Act 2001 (Qld) and Electronic Transactions Act 1999 (Cth).
19. If the Conditions of Auction document is signed using an electronic signature, the Bidder agrees to be bound by these conditions in electronic form and consent to signing the agreement using an electronic signature.
0407 706 435 nathansimon.au