We’ve all heard those sage words of wisdom: “Fake it til you make it.” Whether it’s a new job, the first time meeting the in-laws or being stuck in a conversation at a dinner party about NASCAR, it’s a valuable piece of advice that can serve you well in many situations.
One place it won’t be so much of an asset is in the world of home auctions. Having a solid grasp of the auction process is as crucial to your property buying success as finding the right loan – so maybe it’s worth printing the following tips and taking them with you just in case.
What should I do before the auction?
You’ve presumably done your research already, so we can skip that step. You should also have obtained pre-approval for finance from a mortgage lender in case you win the auction – and so you know the price limit you’re working with.
If you haven’t yet visited the home in an open inspection, the advertising period that precedes it could be the ideal time. The home may even be open for inspection right before the auction starts – it’s the law in Victoria.
Finally, you’ll need to register as the bidder before you start throwing any hands up and shouting numbers. This will involve giving the selling agent your name and address, plus some ID. You can do this at any point before the auction starts.
The auction itself
Okay, so the event is about to start and you’ve got an itchy bidding finger. Before you get too excited, remember a few facts:
- You can’t make a false bid or disrupt the proceedings
- You can ask questions during the bidding, but only a reasonable amount – don’t go crazy
The property will have a reserve price – or a bare minimum for which it is allowed to sell – but this is the vendor and agent’s little secret. If they want, the auctioneer may announce when the reserve has been reached – or, when the home is ‘on the market’.
When this happens, all bets are off. This property has to end up in somebody’s hands, and that somebody could be you. But be careful what you wish for – there’s no walking away form a bid you regret. Unlike with sales by private treaty, there’s no cooling off period after you win, and that’s the case no matter where you are.
If you failed to nab it but you’re still eyeing up the property, you could have another shot if the reserve price wasn’t met. Under fancy real estate lingo, this means it’s ‘passed in’, and the highest bidder can then negotiate directly with the seller for an acceptable price.
We hope this brief guide will be useful on your auctioning adventures. Good luck out there!