Buying at Auction
Auctions are exciting and they provide interested people with a level playing field.
Step 1: Prepare for auction day
Auctions are exciting and they provide interested people with a level playing field on which to compete. Any problems you may have with the property must be resolved before the auction. A ‘non conditional contract’ must be signed and a 10% deposit is required on the day.
Your solicitor will advise you on the matters such as zoning, checking the structural integrity of the house and your obligations under the conditions of sale, which should have already been supplied by your property consultant.
Step 2: Register your interest
After inspecting a property you are interested in buying, it is important to tell the property consultant that you are interested. This ensures that you will be advised if there is a likelihood that the property may sell prior to auction.
Whilst the property consultant cannot disclose other offers, it will give you an opportunity to place your offer.
Step 3: Attending the auction
The auctioneer will conduct the auction in accordance with Tasmanian Law. He or she will read out the pertinent conditions, describe the bidding process and then proceed to invite bids.
If the bidding does not reach the ‘reserve price’ during the auction, the highest bidder will have the first right to negotiate with the property consultant or auctioneer immediately after the auction.
Tips for Buying at Auction
- Research the area.
- Attend other auctions to familiarise yourself with the process.
- Seek legal advice early.
- Plan your finances early and set yourself a limit.
- Ensure you have at least 10% deposit available in case you are the successful bidder.
- Ensure you register on the day to bid (identification will be required).
- Bid with confidence and don’t be intimidated by other bidders.
- If you require support or advice, don’t hesitate to see out a professional.
- For your own protection always take immediate insurance cover on the property.
Common Terms
Settlement Date
Auctions normally have a 30 day settlement from the day of the contract. Owners will often consider a variation to this which must be agreed upon in writing prior to the auction day. Talk to your property consultant if you wish to make this arrangement.
Passed in
This means that the price has not reached the reserve and that you can negotiate on the basis of a normal private treaty sale.
Phone bidding
The following procedure must be adopted when a person intends to bid by phone or through a representative:
- The proposed purchaser must be sent a full copy of the terms and conditions of sale.
- The proposed purchaser must acknowledge receipt of the conditions and send back by return fax.