What is an Auction?
An auction is a method of selling a property through the process of public negotiations. Purchasing property through an auction allows you to publicly negotiate the price. It is best to have your finance pre arraigned or have the money in the bank before you bid as the winning bid will be a binding contract to purchase.
Understanding the bidding process
The auctioneer will open the bidding by asking for an opening bid. For example, an opening bid is placed of $200,000.
The auctioneer then nominates for the bid to go up in increments of $10,000, meaning that the next person that bids will be offering $210,000.
To place a bid, you simply 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.
Once bidding reaches the reserve price, the property is “on the market” and will sell to the highest bidder when the bidding stops.
The reserve price is set by the client prior to the auction and is established as a result of feedback from interested parties during the marketing process.
Registering your interest
If you are interested in bidding for a property, make sure you register your interest formally with a First National salesperson. That way, if a pre-auction offer is made, you will also be contacted and given the opportunity to submit your best offer.
Buying before Auction Day
In most cases you can place an unconditional offer prior to auction day. If the offer is at an acceptable level to the client, all other registered buyers will be contacted and given the opportunity to submit a bid. Simply submit your offer in writing on the Auction Particulars & Conditions of Sale (ask your First National salesperson for a copy), accompanied by a 10% deposit cheque.
Note: Before making a pre-auction offer, you need to read and understand the Multi Offer Procedure. This form will be given to you by the First National salesperson.
Before bidding at an auction you need to:
Have read and understood the Auction Particulars & Conditions of Sale.
Be in a position to bid on a cash unconditional basis. You can organise pre-approval through your bank or mortgage broker and then bid up to a price you are prepared to pay.
Be able to pay 10% deposit (by personal or bank cheque) and sign the contract as soon as the auction is over.