BUYING a home at auction can be as confusing as it is exciting.
You’re bound to have questions — some you might even feel a little embarrassed to ask.
But the experts say there’s no such thing as a silly question when it comes to preparing to buy at auction.
Here, they answer the questions you’ve always wanted to know but were too afraid to ask.
Should I dress to impress?
Sharp dress could indicate a determined buyer, Hocking Stuart Mentone sales manager Simon
“If people are thinking of buying property, naturally they tend to dress up, so it’s a bit of a sign,” he said.
Nicole Jacobs Property director Nicole Jacobs said clothes could add to confidence — an auction essential — but presence was equally important.
“If you’re serious about buying, stand somewhere prominent so you can see everyone, and be loud and clear,” she said.
Bring your chequebook — or arrange another way to pay prior.
What should I bring?
It was crucial buyers came equipped with a way to pay the deposit, Mr Wendt said.
He said aside from the traditional cheque, electronic transfer could be accepted, but payment must be agreed on before auction.
“If you haven’t got a cheque, it doesn’t mean you can’t bid, but speak to the agent before bidding and make sure you can make other arrangements to pay because it will have to be written into the contract,” he said.
What’s the Section 32 and should I have read it?
A Section 32 or vendor’s statement is a document the seller provides to potential buyers. It’s where you’ll find all the important information on a property — the title, rates, any restrictions or leases, plus owners’ corporation information, if it applies.
And yes, you — and your conveyancer — should have read it, Advantage Property Consulting director Frank Valentic said.
“Ideally you want a chance to look over this prior to the day of the auction and to have provided a copy to your legal representative to review and provide feedback on,” he said.
Can I get someone else to bid for me?
If you’ve never bid before, having a more experienced friend or family member do your bidding could be the way to go. And introducing them to the agent can make sure they’re not just another face in the crowd at auction, Jellis Craig, Kensington, director Simon Mason said.
“Whether it’s a representative or yourself, make yourself known to the sales agents so we can keep a strong eye out for your action,” he said.
If a friend or family member is bidding for you, introducing them to the agent could stop them from being just another face in the crowd.
Can I bid in any number I want?
When eyes are on you and the pace picks up, you’ll need to call out a number — but what?
The auctioneer will likely call for a certain rise. And while a multitude of bidding strategies exist, experts agree being loud and clear are key.
Mr Valentic recommended calling the full price rather than rise amount, and opting for an uneven number, such as $751,000. He said as many buyers would end on a round number, it could be the difference that helped to win.
What’s a vendor bid?
An auctioneer may declare a vendor bid on behalf of the seller to kick things off if the crowd doesn’t, or to push bidding along.
This was one of the auction terms buyers sometimes didn’t understand but should be familiar with, Mr Valentic said.
“International buyers are often stumped by our auction process in particular as property is not sold by auction throughout the world,” he said.
What does ‘on the market’ actually mean?
“On the market” and “reserve” were also fundamental terms to know, Mr Valentic said.
Once the bidding is on or close to the reserve price — the point where the vendor is happy
to sell — the auctioneer will declare the property “on the market” and it will be sold to the highest bidder.
Mr Valentic said while his strategy was to bid at least once at the start, a property going on the market was a key point of the auction.
“Don’t be scared to ask the question, ‘Is it on the market?’ Once it’s on the market, you’re playing for keeps,” he said. “That’s when I’d bid aggressively.”
Mr Wendt said some buyers were unaware the reserve price and quoted price range could be different, as vendors weren’t required to disclose their reserve until auction day.
“The vendor can set the reserve at any price level they want. They may not match,” he said.
Read the vendor’s statement ideally well before the auction, and have someone with you to watch on as you sign the contract at the auction’s end.
Why did the auctioneer stop and go inside?
You might see the auctioneer pause proceedings, especially if bidding stalls.
This was usually to speak to the vendors to decide whether to declare the property on the market or pass it in, Ms Jacobs said.
But this referral process won’t happen at every auction.
“Not every agent will do that,” Ms Jacobs said.
“You might think, they haven’t gone inside so I don’t need to bid yet, but they might not and you might miss out.”
Try to find out before the auction whether a referral will happen, she said.
I won, what now?
If you win the keys, you’ll be swept inside to sign documents. Keeping a clear head for this
was important, Mr Valentic said.
“People can come in quite emotional, because it can be a rollercoaster ride at auction,” he said.
“I see with a lot of clients, their hand is shaking like a leaf.”
He said details such as the settlement date and purchase price had to be filled in on the contract, which was legally binding once signed — so it was critical to get these right.
“Get another person there that can give you a hand to double check it because your emotions could be up in the clouds,” he said.