Auctions have got a bad reputation in previous years, but more and more buyers and sellers are actively opting towards the auction method to transact in NSW.

Legislation has been tightened to make it fair and transparent with buyers on a level playing field. But what should you know about buying at auction?

Prepare your finances.

Seeking lending approval is one of the most obvious but crucial steps to buying a home. Not being able to obtain finances at settlement could cause loss of your deposit and face further losses.

Establish a budget. Buying a home often starts logically and ends emotionally. Setting a budget or your “walk away price” is crucial. Think to yourself “what am I happy to buy it for but what am I happy to lose it for?” After an auction it is quite common for buyers to regret overpaying but just as common missing out as they should have paid more to secure their dream home.

Offering prior to auction.

Sometimes time frames or excitement levels do not permit waiting to auction. Many properties do sell prior so enquire if the seller is open to this.

Look over the contract Ensuring a solicitor or conveyancer looks over the contract is important. The contract will establish the terms you are buying under, what you are buying and how. Usually the contract for sale will be on display in person or digitally. If not ask your agent.

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Make changes.

Yes it is possible to request changes to some of the terms in the contract for sale ie; settlement dates, deposit and special conditions. As long as both buyer and seller agree changes can be made and is often best done prior to the auction.

Keep in contact with the agent

The agent is employed by the vendor to handle the process. Ultimately, they are working for the vendor to ensure the highest end sale price, but they are also there to help the process runs smoothly. Advising the selling agent you are interested will enable open communication of any changes to the contract, terms, or more importantly a pending sale prior to auction. Playing the silent game can lead to missing out.

Be prepared on the day

Ensure you have your deposit and all documentation with you. Copies of any special conditions or changes agreed upon prior is helpful. You will be required to sign the contract of sale and pay the deposit (usually 10%) directly after the fall of the hammer. You will need to show identification and be registered to place a bid.

What if I unable to make the auction?

If you are unable to attend the auction it does not preclude you from buying. You will need to sign an authority for someone to bid on your behalf. If you are late you still can be registered prior to the fall of the hammer but it is good practise to arrive early.

Trever Molenaar
Trever has worked in the industry selling property for over two decades. This lifelong profession has enabled him to master the art of negotiation. Trever’s own personal values relate through to his professional life 
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Molenaar x McNeice
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