Buying at Auction…For Those Wary of the Process!

  • If you don’t want to buy at auction or are not in a position to do so, it is still worth inspecting the property on or before the auction. In the last 2 weeks, I have had 2 auctions which were passed in, but sold within hours afterwards to buyers who had inspected previously. I often have buyers who are enquiring a couple of days after the auction…only to find out it’s too late!!
  • There is a common belief that if you were the highest bidder, and that the property is passed in, you then have priority to negotiate with the seller’s post auction. This is not correct. All other buyers are then able to make an offer as well; thus, you can end up in multiple offer situation. In my opinion, it is a situation which is more stressful than the auction, as you don’t know what the other buyers are offering, and therefore you could miss the property by only a very small amount!
  • Be careful who you get your advice from. When you want to make an offer on a property which has been passed in at auction, within the next 2 business days of auction date it is only under auction conditions if you were registered to bid. Some of my clients of last Saturday were told by their broker that they could not make an offer before two days, which was incorrect!!
  • Most of our sellers will now pay for the building and pest inspection to try to get as many buyers as possible to bid on their property. These inspections are independent, but you are welcome to do your own if you prefer. However, make sure that you allow enough time to organise the inspection, especially if the property is tenanted as we need to give 24 hours’ notice to the tenants
  • Generally, buyers don’t like auction because they don’t know how much the property will go for. In Queensland it is illegal for the agent to give you a price range, and unfortunately, I know some agents still do it!  But if you tell the agent, what the price range is you are looking at, they can tell you if it’s still worth bidding.  You can also ask to receive the Comparative Market Analysis (CMA) which will show you how much the properties are selling for in the neighbourhood.
  • You can often negotiate to bid on different terms to the auction contract. For example, a longer settlement, a smaller deposit, or an extension of time to pay it. Don’t be afraid to ask, the seller may agree to your terms.
  • You don’t need to be present at the auction to be able to bid. You can bid over the phone or have someone bidding on your behalf. However, there are still some forms to sign, so make sure that you check with the agent prior to the day!
  • Some of bidders are shy on the day, and it can be a bit stressful. Don’t hesitate to ask the agent to help you bid, if you don’t really want to raise your hand.
  • Ask the agent as many questions as you can prior to the auction, so you are informed and comfortable with the process.

You can find more information in the Buyers Guide from the Auction Group which calls all our auctions.  Let us know if you would like to receive it by email!

Feel free to call me if you would like to discuss how to bid at an auction…even if it is a property listed with another agent, I am happy to help!

All the best with your bidding.