BUYER'S GUIDE TO AUCTION

What is a Real Estate Auction?

An auction is a method of selling a property through the process of public negotiations. Purchasing property through the auction process allows you to publicly negotiate the price, which helps ensure you are paying current market value.

Contact your solicitor

It is recommended that you have your solicitor check the Particulars and Conditions of Sale which will include terms and conditions prior to auction. Duncan Realty provides information packs which will include a Property Fact Sheet, the Auction Documents, Certificate of Title and may include a LIM. If you have any concerns prior to auction, we recommend you consult your legal advisor.

Registering your interest

If you are interested in bidding for a property, ensure that you register your interest formally with a Duncan Realty salesperson. That way, should a pre-auction offer be made, you will be contacted and given the opportunity to submit your best offer.

The bidding process

• The auctioneer commences by referring to the terms and conditions of sale, then reviews the features and benefits of the property
• The auctioneer will open the bidding by asking for an opening bid. If nobody bids the auctioneer will recommend a starting or opening price
• The auctioneer will then nominate for the bid to go up in increments of an appropriate amount
• To place a bid, you simply need to attract the attention of the auctioneer by raising your hand, calling out your bid or nodding your head when you catch the auctioneer’s eye. Be confident with your bidding to ensure you are successful on the day
• The reserve price is set by the vendor prior to the auction and is established as a result of feedback from interested parties during the marketing process
• Once bidding reaches the reserve price, the auctioneer will announce that the property “is on the market”. This means the property will be sold to the final bidder
• The Auctioneer has the right to sign on behalf of the Vendor.

What if the property doesn’t sell (passed in)?

If the reserve price is not reached the auctioneer will confer with the vendor to obtain further instructions. In some situations the reserve price will be revised and bidding will begin again or, the property will be passed in to the highest bidder. The highest bidder then has first right to purchase the property immediately after the auction at the reserve price, otherwise the property will be offered for sale to all other interested parties.

Conclusion

Prior to auction you must:

• Have read and understood the Auction Particulars & Conditions of Sale
• Be in a position to bid on a cash unconditional basis. You can arrange pre-approved finance through your preferred bank or mortgage broker. Bid confidently on the day. You will have a figure in mind but it would pay to have some extra in reserve as there may be someone else there that has the similar figure in mind. People will perceive different amounts for value - don’t miss out
• Be able to pay 10% deposit (by personal or bank cheque) sign the contract as soon as the auction is over.