Attending Auction

Auctions

Can be fast and overwhelming and so attending a few auctions for homes that you are not interested in as practice may help to give you a feel for how it all works.

Location

Auctions can be held "on site" of the property for sale, or in other venues organized by the selling agent such as a reception or auction room.

Inspections/ Contracts

Inspections are held prior to the day of auction and sometimes on the day of the auction. Contract of sale will be provided by the selling agent on behalf of the seller(s).

Home Loan Approval

Potential buyers are expected to have a home loan approval when bidding at auction unless it is a purchase with own funds.

Deposit

A deposit is expected to be received on the day of the auction, and 10% is the usual amount required. Payments accepted are usually personal cheque, deposit guarantee bond or bank cheque/money order. Identification checks would normally be carried out for personal Cheque. It is best to check the deposit requirements with selling agent prior to attending to the auction.

Reserve Price

The seller(s) decides on the lowest price that they will accept for the sale of the property, and this is set as the reserve price. Although this is price is not made public, the selling agent should be able to give you a "ballpark" price. If the bidding exceeds the reserve price the property is sold to the highest bidder. This is indicated by the auctioneer with 3 calls and the fall of the hammer.

Procedures

Auctioneers will announce that the property is "on the market" when the reserve price has been reached.

Any person who wishes to bid at an auction must be a "registered bidder". The selling agent will register you as a bidder, and also allocate you a bidder’s number to display as you bid.

Identification is required to register, such as a government issued document - driver’s license or passport. In the case of a passport, you may also need something else showing your current address such as a utilities account. If you are a couple bidding on a property together, only one person is required to register.

If the reserve price is not met, the property seller(s) and their agent will usually negotiate with the highest bid, or the highest bidders. If unable to negotiate a sale, the property is then "passed in" - meaning it didn't’ sell on the day of auction. It may then be placed on the market as "For Sale". Auctions do not have a "cooling off period" like straight purchases, and therefore the sale to the successful bidder on the day is final.