/ STEP 1
RESEARCH
AND VIEW PROPERTIES
Prepare your list of properties you’d like to view. Avoid dismissing auction properties from your list as many good homes are often listed for auction.
Once you’ve viewed and found a property you would like to buy that is being sold by Auction, it’s important to start your preparations early. The better prepared you are, the more comfortable and confident you will be throughout the process.
/ STEP 2
PREPARE FOR THE AUCTION
DUE DILIGENCE Download or request the info pack from the agent and register your interest with them so you are kept informed on important updates. You can expect auction info packs to include Title, LIM, Building Report and other legal information about the property. Its recommended you forward the info pack to your solicitor, and seek independent legal advice.
SECURE FINANCING You may already have a conditional pre-approval from your bank. Because auction purchases are unconditional you want to discuss with your lender the specific property you’re looking to purchase and meet any remaining conditions they have before bidding at the auction. Confirm your budget and ensure you have a 10% deposit ready to pay on the day when you are the successful purchaser. Part of the conditions for finance is making sure the home is insurable. We recommend contacting an insurance provider and requesting an offer of insurance beforehand. Its good to think about a range of prices: What you would be happy to pay > What you think fair market value will be > The maximum price you’re prepared to go to.
REGISTER TO BID Complete the necessary registration forms. Should you need any variations, you should discuss these with the listing agent ahead of the auction. Common variations are for deposit amounts and settlement dates. When you register you will also need to let the agent know if you will bidding in-person at the auction or by phone.
/ STEP 3
PARTICIPATE IN THE AUCTION
UNDERSTANDING AUCTION RULES Familiarise yourself with the auction procedures and bidding rules. REINZ Best Practice Guide for Auctions summarises this well.
BIDDING AT THE AUCTION Once the auctioneer has done their introduction and summary of auction rules, they will invite an opening bid. Taking control and nominating an opening bid that you are comfortable with will allow the auction process to progress. Showing confidence in your bidding right up to the budget you’ve set for yourself can strengthen your position to secure the property.
VENDOR BID The auctioneer may nominate and place a bid on behalf of a vendor as long as it is below the reserve price. This forms a ‘counter bid’ to let buyers know we are still below the reserve price.
PAUSE IN THE BIDDING In the event the bidding stops short of the reserve, the Auction will pause and a private negotiation will commence between the highest bidder and the Vendor. The property may or may not come back into the room depending on how the negotiations go. We encourage buyers to continue bidding if the price is still within their budget to avoid disappointment in a ‘pause and negotiate scenario’.
REACHING RESERVE Once a level the vendor has authorised the Auctioneer to sell at has been reached or surpassed, the auctioneer will be permitted to sell to the highest standing bidder. The end of the auction will be marked by 3 calls to give bidders a final opportunity to consider any further bids before the gavel being knocked down and the property marked as sold.
/ STEP 4
COMPLETE THE PURCHASE
WINNING AT AUCTION
As the successful purchaser you will be required to sign the auction contract immediately and pay the deposit.