Land and Property Auctions in Australia
Why do houses, property and real estate get auctioned?
When the market is hot generally it is a good time for property to be auctioned as there will be many bidders making a competitive environment and with the aim of achieving a high a price as possible. Other reasons for houses and property going to auction can be mortgagee repossession, liquidation or foreclosure.
Buying a home at auction
Before you go to the auction, make sure the lot in which you’re interested is still going to be offered on the day. Lots can be withdrawn for all kinds of reasons and you don’t want a wasted journey.
Get there nice and early in order to complete the paperwork, get a good spot and familiarise yourself with the room. Also, the order in which lots are offered may change due to withdrawals and other factors, so don’t miss out just because you weren’t expecting your lot to be up so soon.
Before you can buy, you need to register and obtain a number. Not all auctions are run the same, so be sure to follow correct procedure for the auction you’re attending – you’ll find all the details in the front or back of the auction catalogue.
You will certainly need ID, usually including photo ID, and proof of residence. You’ll also need a 10% deposit to pay over for your chosen lot if you are successful. The minute the hammer falls, you have exchanged on the purchase and are obliged to complete.
Know your upper limit and DO NOT go above it. It’s very tempting to think “Why not, I’ll just go another thousand or another 500″ and before you know it you’ll have been inched up a few thousand away from your original limit. If you can’t trust yourself to stick to your budget, get someone else to register and bid on your behalf.
If you can’t attend the auction, the auction house may have the facility to accept proxy or telephone bids. Some of them are moving toward online bidding, too. The disadvantage to you is that you can’t see the auctioneer’s behaviour, nor that of your fellow bidders and bidding at auction does have similarities to a game of poker.
After the auction, you’ll usually have 28 days to complete, but this can be less – 14 days is not unusual.
Bidding tips for real estate auctions:
- Contact the company handling the land auction, get your questions answered, and familiarize yourself with the process.
- Do your homework. The only way to evaluate a property is to study. An informed bidder won’t have regrets.
- Consider attending an auction or two before you plan to bid this can help you feel comfortable in an auction atmosphere.
- Prepare a Strategy. Show up with confidence in knowing what you will spend no matter what the situation.
- The team members working the ground are there for you. Get to know them and feel free to ask for their help.
- Listen to the Auctioneer. If you don’t understand the bid calling ask the ground workers.
- Don’t go home sorry, if you want it, you do have to bid. So many inexperienced bidders shy away and miss their chance. You have done your homework, built a plan and now you’re ready.
More Tips for buying property and land at auction
Ask for a title commitment – Most auctioneers will provide title information. If not and you’re interested in bidding on a property, ask the auctioneer for a title commitment. This will show the property is clear of any outstanding debts.
Ask for land specifics – Make sure you are aware of anything that could affect your future use of the land. Ask in advance about easements, zoning or council laws for the area.
Be clear on access – If there are any questions about how to access the property, get those cleared up ahead of time. Landlocked property is a common complaint and can lead to future legal bills.
Be prepared to buy – If you offer the winning bid you will typically be asked to deposit which is nonrefundable. If you are the high bidder and later learn you cannot get financing, you will lose your deposit. It is usually advised to seek pre approval for finance.
Don’t be afraid to ask for help – Auctions can be intimidating for the inexperienced. There are auction assistants around prior to bidding who can answer your questions. And the auctioneer will usually explain what is taking place and the processes.