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Purchasing a property is a major decision and all of the process associated with it can be quite daunting. Auction day can be a nerve wracking day for all involved, but remember that the agent and auctioneer are there to assist you in your efforts to purchase and can often be your greatest allies on the day.
A few tips that may help you secure the property:
The wait and see strategy is a popular one amongst purchasers but ultimately does little towards achieving a purchase. It is the bidder who bids with confidence and without hesitation that in most cases controls the flow of the auction. You are much better to set the tone and show your competition that you intend to buy, then sit back and potentially be on the back foot.
Although the auctioneer on the day is employed by the seller, ultimately they want to achieve the same outcome you do – a sale. Ignoring suggested increments, interrupting & continually questioning if a property is “on the market” are not helpful to establishing a working relationship between both parties. You are welcome to suggest any bid or amount you like, but remember the auctioneer may refuse a bid if it is not deemed in the best interest of the seller.
The auctioneer is legally allowed to make bids on the sellers behalf. A vendor bid must be disclosed by the auctioneer, who will use the words “vendor or seller” bid.
It is not the reserve price and indicates a price at which the vendor will not accept. A vendor or seller bid is used in different circumstances to either start the bidding, increase the bid to a level closer to what the vendors will make in buyer-centric.
Vendor bids are helpful because it gives you a better idea of what number it’s going to take to buy the property.
Why must an agent or auctioneer ask you to increase your own bid? This is a common occurrence in today’s market so don’t feel uncomfortable about it. At some point in the auction, the estate agent or auctioneer may come up to you and ask you to increase your own bid. This may occur, as your current bid may not be at a price the vendor will accept. Therefore you may need to increase your own bid if you wish to purchase the property.
Most auctions I facilitate have conditional buyers (buyers that can’t bid under auction terms and conditions) waiting and hoping that the property passes in. Should the property pass in, everyone will have equal opportunity to submit their offer.
If you can bid under auction terms and conditions, give it your best shot at the auction as it is the most transparent way to buy and, in most cases, less competitive.
I would recommend going and spectating at a few auctions prior to participating. Watch which purchasers are successful and the tactics they employ. Feel free to get in touch with the agency, or call the Apollo Auctions team and we can supply you with addresses, dates and times of upcoming auctions that are close for you to view.
You can register at any time prior to the fall of the hammer. This can be at any of the open homes or in the period before to the auction. Registering to bid early will save you the stress of registering on AUCTION DAY when the property can sometimes get crowded.
In order to register you will need to provide the agency with your name and address and some photo identification. A drivers license or passport is normally preferred. Additionally, the agent may also request further proof of your current address.
The Agency will record these details and provide you with a bidder number. Even
if you register prior to auction day, you
will need to see the agency when you arrive at the action. After providing proof of your identify, you’ll receive your number of bidder card. You must display this number to the auctioneer when making a bid during the course of the auction.
If you register prior to auction day, you may not receive your number at that time. When you arrive at the auction, you will need to see the agency, provide them proof of your identity, and receive your number or bidder card at that time.
The Agency is not permitted to provide your information to any other person other than a Fair Trading inspector or the court. The Auctioneer, or Marketing
Agent may disclose to the seller of the property the identity of a bidder if it is necessary for negotiating the sale of the property after the auction.
Make sure that the Auctioneer can see you. Remember to hold your bidder number high and call out your bid in a loud and clear voice.
You can call out an exact amount. For Example: “$570,000”; or indicate an amount you wish to increase the previous bid by . For Example: “Another $20,000”
If the Auctioneer calls the incorrect amount or misinterprets your bid, call out immediately to the auctioneer and clarify your bid.
Absolutely. In fact up to 50% of Auction properties are sold prior to auction day. However, the acceptance of offers prior to auction day is a decision made entirely by the vendor.
If you wish to submit an offer prior to auction please ensure you have undertaken all research and your due diligence as your best chance to have your offer accepted is to do so under auction conditions.
Definitely not, it may be that the vendor’s price expectation sits above the market’s expectation.
Or perhaps your offer is under-estimating the value of the property. Regardless, after the vendor has had the opportunity to see the full marketing campaign and see the interest in the property on auction day, both parties will often re-evaluate their expectation.
Property transactions are a process of negotiation and buying at auction is no different. If you wish to alter the terms of settlement, deposit, inclusions or conditions of the contract of sale, just speak to the Listing Agent. However ensure you do not wait until Auction Day as this may be too late, these conditions must be agreed upon by the vendor prior to you commencing bidding.
Although you are at liberty to request variations you may not always get your way especially if there is strong interest in the property. If your conditions are not agreed upon prior to auction do not be deterred. If the property is not sold at auction the vendor is often more receptive to conditional offers subsequent to the day.
Just as there are benefits to a seller who chooses to market their property by auction, astute buyers also may benefit by the process. These are some of the benefits to a buyer who chooses to buy at auction;
If a buyer is in a position to purchase
at auction they may actually find they have less competition than if they seek
to purchase a priced property. This is because some buyers are not in a position to buy under the cash-unconditional terms of an auction.
If a property “passes in” at auction (does not sell), often several buyers come forward afterwards seeking to buy with a range of special conditions attached to their offer (finance approval, building and pest inspections) etc.
This then places buyers in competition with each other post-auction. Some buyers have secured excellent value at auction simply because a cash-unconditional contract was a high priority for the seller who chose to take the highest offer under auction conditions rather than consider conditional offers afterwards.
With an auction offers and negotiation are public - out in the open. With a private treaty sale (sale by price), if two or more buyers want the same property at the same time, it is standard practice that each buyer will not be aware of the offer being made by other buyers.
This means all competing buyers are “shooting in the dark”.
At auction all offers are made publicly (in the form of bids) and a buyer can choose to increase their offer only as much as they want to above the last highest offer. The buyer is free to withdraw from the bidding any time they feel the price has gone beyond the figure they are prepared to pay.
All bidders shall be deemed to have read and acknowledged the “Contract Warning” and the “Disclosure Statement” under the Body Corporate and Community Management Act 1997 which are annexed to the Contract of Sale by virtue of the fact that they have been on display prior to this auction.
Cash unconditional basis, not subject to a cooling off period, finance, or building and pest inspection. GST may be applicable to the purchase price.
TERMS: $ DEPOSIT ON THE FALL OF THE HAMMER AND THE BALANCE IN CASH 30 DAYS, OR ANY OTHER SUCH DATE OR TERMS AS SPECIFIED BY THE AUCTIONEER PRIOR TO AUCTION.
An agency is the relationship, which exists at law between two or more persons whereby one (the agent) is authorised to act on behalf of
the other (the principal) to do certain specified acts. A common form of agency occurs in the sale, purchase and leasing of real estate.
Selling the property without warranties as to the condition and/or the fitness of the property for a particular use. Buyers are solely responsible for examining and judging the property for their own protection. Otherwise known as “As Is, Where Is” and “In its Present Condition.”
A preferred marketing option where you list your property without a price, supported by very intensive marketing leading buyers to the auction day where they must bid against each other to successfully purchase your property in an unconditional situation. / A public sale of property in which prospective purchasers bid until the highest price is reached.
Person holding an auctioneers license and able to conduct and call auctions.
A verbal offer to purchase
An authorised person who is responsible for checking buildings in the course of construction and completed buildings to ensure that they have been constructed in accordance with building control provisions.
‘Buyer beware’, that the risk in a property transaction lies with the purchaser.
Current or Competitive Market Analysis (CMA), is a written price comparison of your property with others that are for sale or were recently sold.
Items of property that can be physically removed from your house or business because they are not attached to it in some way. Examples may include fridges, curtains, carpets, easily removable light fittings and wall heaters, and sometimes furniture. If chattels are to be included in the sale, the seller should specifically state this in the Sale and Purchase Agreement.
Any contract that includes conditions that must be satisfied before the parties become bound to carry out the terms of the contract. The contract is called “conditional” until
the conditions listed are satisfied. Both the buyer and the seller can put conditions in the offer. Buyers often ask for conditions about checking the Certificate of Title, and getting finance or a building consultant’s report. A conditional contract is still legally binding, but the obligations under it are suspended until it becomes unconditional.
The fees for selling the property - payable by the seller, to the real estate company.
A short statutory period after the contract is made, during which the purchaser may cancel the con- tract unconditionally. Does not apply in the case of auctions.
Percentage of total consideration, or an agreed amount, paid on exchange of contract for purchase of an asset.
Items that are presumed to stay with the property when sold but have been specified on the contract as not remaining.
Items of property that are attached to
the house or business because they are permanently attached in some way (by nails
or wires for instance). Examples are the stove or oven, built in furniture, light fittings, fitted carpets and TV aerials.
A freehold property has a clear title of ownership and is not subject to lease.
Moveable items you decide to sell with the property, such as pool equipment, fridge, freestanding glasshouse, shed or playhouse, dishwasher etc. These are noted in the contract if they are included in the sale.
Sometimes land is subject to a lease. The owner of the land leases to the tenant for a fixed rental sum for a fixed period, e.g. # years.
A contract between the owner and the real estate company marketing the property, detailing the length of the agency, commission rate and any additional costs. The type of marketing method to be used is assigned and a summary of information about the property is detailed on the listing authority.
Money paid by a seller that goes directly to increase advertising spread.
A promotional package put together to give a property exposure to the market. It may include advertisements, a calendar of dates for advertisements, open homes, buyer contact and service.
Usually called ‘Auction’, ‘Tender’ or ‘For Sale by Negotiation’. The price is not revealed to buyers during the marketing promotion.
During a real estate auction when the bid has reached the vendor’s reserve price the property is announced as ‘on the market’ and is going to be sold at that auction.
If a property is not sold at auction because the owner’s reserve price has not been reached, it is passed in.
The reserve price is the minimum price the seller will accept for their property at the auction. This is kept confidential between the seller, listing agent and auctioneer.
A legislatively required bank account where monies are held by an agent for or on behalf of another person e.g. deposits, rental etc.
A document that records the instructions for
the assignment, the purpose and basis of the valuation, and the results of the analysis that
led to the opinion of value. A Valuation Report may also explain the analytical processes undertaken in carrying out the valuation, and present meaningful information used in the analysis. Valuation Reports can be either oral or written. The type, content and length of a report vary according to the intended user, legal requirements, the property type, and the nature and complexity of the assignment. The terms, Valuation Certificate and Valuation Report, are sometimes used interchangeably.
A type of bid at an auction which is made by the auctioneer on behalf of the vendor and clearly dis- closed as either a Seller or Vendor bid.
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