What do I need to know / do pre auction (buying not selling)?

Those 2 points are really crucial.

I was looking at a house in Windsor (Qld) a few months back. We thought low $700s would be a fair price based on comparables. Ended up not registering to bid at the auction as there were a few issues with the block.

It ended up selling for $815k and there was only one registered bidder!

 

@Dan Donoghue there are different rules for different states. E.g. in QLD you need to register to bid in VIC you can literally walk past on your way to the shop and have an auction in progress and bid and even win the property.

All auctions are unconditional and are sold as is, you can negotiate on anything before hand but STF or STB&P will not be approved and you will need to have these done before auction.

Settlement is usually 30/60 days, if you need longer (or shorter) you will need to have this agreed prior. The REA will state that 10% deposit is required after the auction which you can negotiate but typically 5% is easy to be approved anything below that becomes more increasingly difficult to be approved.

The deposit you will need to find out which way the agency will accept deposit, some will only take cheque or physical cash (no EFT). Others will accept EFT on the day some will accept $1k on the day and the reminder paid on the Monday. Work out what you can do and what the agent will accept.

Bidding like @Leo1234 said setup your limit and bid until you get to that limit and if it exceeds your limit don't worry it isn't selling for what you think is value. 2 weeks ago I bidded at auction and I thought it would go for 650-680 and my father who has numerous IPs thought it was worth 650-675k and we didn't exchange any notes until we both had our price so 5k difference on the highest price and this was what we considered FMV. Anything less than 650 would be a good buy for us and anything over 675/680k was a good deal for the vendor. Anyway it went to auction and ended up selling for 702k, if someone came to be before the auction and said I bet you a $1,000 it will go for over 700k I would of taken them up on it but how wrong I was.

So it wasn't meant to be but we are still looking and not upset but you need to have all your ducks in a line and don't delay in your bidding or consult with your partner or show any emotion signs that you are excited or that you are getting to the top end of your budget.

Most of all enjoy the thrill, I find it exciting and it is far more exciting bidding at auction than being a spectator.

 

It is in QLD . I register on the day though at the address before the auction kicks off yes? I don't need to register like a week in advance or anything?

 

Nope just before the auction starts you need to be registered as in on the day.

Bring ID and make sure you have everything else finalized as you are just bidding the price is the only unknown factor really.

 

We have purchased 2 properties at auction in Brisbane recently (and previously 2 in Sydney at auction).

They really struggle with the concept up North as people are not accustomed to buying unconditionally - so if you know what you want it does represent an opportunity to buy well.

One thing - Qld does not really allow delayed settlements, you have to be ready on the day. We very nearly came unstuck on the last purchase because of this.

 

No it won't not unless you put your hand up to scratch your head and it gets taken as a bid !


You need the cash or chq or transfer ability if you win....unless organised to do other deposit

No cooling off....so make sure you know your buying along with any defects.....

If it does not value at the win bid you need to be able to put in extra money yourself to settle.

If you cannot settle you lose the 10% and maybe some costs....

Good luck

 

On the subject of cheques, I was surprised that a personal cheque (from a chequebook) suffices for the deposit (in NSW at least.) I thought it needed to be a bank cheque which I found confusing since you wouldn't know the final price before the auction.

I didn't have a chequebook attached to the right account, but I was able to go into the bank and ask for a "personal cheque" / "temporary check" which was like an instant chequebook mapped to the account of my choosing (only 3 cheques though.)

YMMV, but the selling agent told me that I could have given them a cheque from any account just for the exchange (signing of contracts after the auction) and replaced it on the following business day with a bank cheque for the correct amount, from the correct account, and have the original cheque discarded.

 

Yeah...as above.....do not bid against yourself....i have seen a number of agents do this to inexperienced people.....if your the highest bidder and it passes in you get first dibs at negotiate with the vendor after auction.

 

Last auction I went to in Perth, a builder bought a $1.5 million block of land dressed in old sneakers, track suit pants, a t-shirt and cap. I don't think wearing "nice" clothes is essential.

In Victoria, after a house is passed in at auction, the seller can negotiate with the highest bidder under auction conditions. I did this on my last sale but it only took 5 minutes after the auction. I don't know how long auction conditions last but it could be three business days.

According to Section 31 Sale of Land Act 1962 the cooling of period does not apply where:

• the sale is by publicly advertised auction
• the land is sold-
  • within three clear business days before the day on which a publicly advertised auction for the sale of that land is to be held;
  • on the day on which a publicly advertised auction for the sale of that land is held; or
  • within three clear business days after the day on which a publicly advertised auction for the sale of that land was held;

It happens all the time in Perth. The Auctioneer could start the bidding with a vendor bid or pass in the property. I have seen both happen. Real Estate Agents will conduct an auction even if there are no interested parties because if a sale is negotiated in the next couple of days, it will be under auction conditions.

This is what we did in Melbourne. We got an early offer but we didn't negotiate to sell because we specifically wanted the house sold under auction conditions, i.e. no "cooling off" period and no "building and pest".

 

Also, bid at your practice auctions. Bid early so you don't actually end up buying it.

If you are bringing someone for moral support make sure they come to at least one practice auction too.

 

This sounds like a very dangerous practice as if you are the final successful bidder you are legally obliged to buy.
You bid, the property is declared on the market and then no other bids.........
Marg

 

I always get pre approval from the agent for a 5% deposit rather than the standard 10% and I have never had an agent/vendor say no. They don't know if your going to be the highest, and they don't want a bidder not to be there.

 

In addition, be prepared to slow the bidding down. This worked for me at my first auction three years ago. There was only one other bidder by this stage and the auctioneer was taking $5,000 bids, I had bid firmly and confidentally, but the price was getting up there and I didn't want to go too high.

I offered $1000; the auctioneer didn't take it and asked for $5,000 again - so I said firmly, 'are you refusing to accept my bid?'

They accepted it after an uncomfortable (for me) silence and it slowed the auction down. I bought the place after a few more bids at a reasonable price. The other party was starting to lose confidence by this stage, so it was the right time - in hindsight.

Slowing the bidding down can flag to the other buyers that you are reaching your limit though, and I believe auctioneers can refuse bids ( no

The other thing to watch for is the 'side kick' agent. If you a contender, one of the agents will stay by your side, whispering things like 'you're very close now' to encourage you to bid higher. Take it with a grain of salt.

In Melbourne they don't usually start the auction anywhere near the reserve.

Is this common elsewhere?

 

Had very similar experience few years ago, I sent my wife to an auction (I was working can't go and the property is must to have for our investing strategy). I was over the phone while she was putting her hand up. Towards later stage of bidding there was an agent stood beside her told her to bid for a price and I told my wife to tell him F off. She slow the bid by $500 a time and we got that property. The final price is lower than the side kicker say.

 

You need to be strategic, scare the completion, as you walk through the house during a full home open... mention the word
Asbestos. ...

 

i really like the technique of "slowing the auction down".

IMO, yes it gives off that the current price is nearing market value perhaps to uneducated bidders

Yes it does also signal that you are at your limit, however if you just keep going toe to toe with the other bidder(s), hopefully you can outride that?

 

My heat pounds bidding on stuff on E-bay!

 

If you are the highest bidder you have the first right of refusal to buy the property at the vendors reserve price. If you don't agree to the price the agent than can approach any other interested parties and than it's open to anyone.
Auction conditions are 3 business days prior and 3 business days after the publicly advertised auction. This is in Victoria.

 

One of the Victorian auction rules that the auctioneer reads prior commencing the auction is:
The auctioneer may:

• refuse a bid at any time during the auction, including when the auction hammer is falling
• if there is a dispute over a bid, resume the auction at the last undisputed bid or start the bidding again
• refer a bid to the seller at any time before the conclusion of the auction withdraw the property from sale at any time.

So the auctioneer can refuse your bid if you are trying to stall the auction. He will get back to you later anyway. This rule is there more for someone disrupting the auction but it will be used in other instances such as this. You can read more about the rules in link below.
Buying property at auction - Consumer Affairs Victoria

 

Wow, that's a new one on me (I don't do Vic at the moment). So you either agree to the reserve price or they can go talk to any other interested parties and don't have to (solely) deal with you? Phew. I also didn't know the 3 bus days before - that's a good one to know asit may swing the vendors to agree to halt the auction and accept your price (buyers positive) but still be under auction conditions (usually a vendor positive).
Thanks for that information.