If you are intending to bid and buy on auction day, it’s best to be fully prepared. The Contract of Sale should be available from day one of the campaign, and on display at the auction. Buyers should read carefully through the contract, ask questions, and have a solicitor check the contract prior to auction day.
A seller may choose to sell the property prior to auction if a satisfactory offer to purchase is presented. To avoid disappointment if this occurs, you should register your interest with the selling agent early on, so that you can be informed if an offer is presented on the property, allowing you the opportunity to submit an offer in competition.
At Harcourts, our Sales Consultants ensure that all interested parties have an equal opportunity to purchase any property we are marketing, so it is important that you make the Sales Consultant aware of your interest.
Here is some other information for purchasing via auction:
INSPECT THE PROPERTY AS OFTEN AS YOU LIKE
There are usually three open homes scheduled leading up to the auction date. If allowed by the seller, and if the circumstances of the property allow it, you can also arrange to inspect the property by appointment.
ARRANGE YOUR FINANCE
A sale by auction is an unconditional sale, so it is vital that you have finance confirmed and know your limits, before you bid.
UNCONDITIONAL BY NATURE
Auction is an unconditional sale, which means that there is no “cooling-off” period. If you purchase at auction, there is no provision for you to cancel the agreement. It is binding on both the buyer and seller. A deposit (usually 10% of the purchase price) is payable upon the signing of the contract. Buyers may request a lesser deposit amount, but any such request is subject to the written approval by the seller, prior to the commencement of the auction.
BEFORE THE BIDDING BEGINS…
Any party who intends to bid must register prior to the commencement of the auction. The auctioneer will not accept bids from any parties that have not registered or do not display a ‘bidder identifier’. Usually your driver’s licence or passport is sufficient identification to register.
Position yourself so the auctioneer can see you clearly. Also, be sure to identify yourself to the Sales Consultant. You might feel more comfortable having a family member, friend or the Sales Consultant submit your bids for you. However, anyone bidding on your behalf must have supplied a written authority to the agent or auctioneer prior to the commencement of the auction.
It’s important that you bid on the property from the outset, rather than employing tactics such as waiting for the auctioneer to announce the property as ‘on the market’; a strategy that has been heavily promoted in some media circles, but one that often ends in disappointment. The auctioneer is not obliged to announce that the property is ‘on the market’ or that the reserve price has been met. We recommend you ensure the auctioneer is aware of your interest as early as possible. This approach will also help you get into the pace of the auction in a controlled manner allowing you to make rational decisions rather than placing yourself under unnecessary pressure when the property is about to be sold.
PASSED IN
In the event that the property fails to reach the seller’s reserve price and is “passed-in”, the highest bidder gains the right to negotiate and buy the property. If the highest bidder declines this opportunity, it is normal for other interested parties to be offered the opportunity to submit offers. If you’re one of the ‘under-bidders’ it’s recommended that you delay your departure from the auction until you are certain that the property has been sold. Auction conditions apply to a successfully negotiated sale price up until midnight on the day of the auction.
SETTLEMENT DATE
The settlement date is nominated in the ‘contract of sale’ as a particular number of days from the date of the contract, for example: ‘30 days from date of contract’. This date of settlement is enforceable and if you have concerns about it, you should notify your Sales Consultant well before the auction commences, as the seller may be open to alternative settlement date requests.
For more information or any questions about the auction process, speak to one of our highly skilled Sales Consultants on 4628 7444.
