Buying at Auction

Auctions are designed to get the highest price possible for the vendor. The real winners at auctions are the bidders who can stay calm and composed during the frantic bidding. Here’s a checklist to follow when buying at auction to maximise your chances of getting the property at or under your maximum price:

• When you buy at auction, there is NO COOLING OFF period to enable you to reconsider your circumstances. No Section 66W certificate is required – it’s included in the auction contract. When you’re the highest bidder, the sale is final. This can seem daunting, but not if you are well prepared and know the maximum sum you’re willing to pay.
• Make sure you are registered to bid!
• Be aware that the Vendor can make a bid to inject some pressure into the auction process. Don’t be put off by this – it’s simply done to move things along when bids are below the reserve price.
• Take a strategic position in the auction room, or at the site of the property – ideally where you can see the potential bidders and the real estate agents bussing around between the interested parties and vendors. This will give you a sense of what’s happening.
• Don’t starting bidding to soon; be patient. You know that the game is on when the auctioneer announces that the property is on the market – this is when the reserve price has been reached, and the highest bidder will be sold the property.
• Don’t be afraid to withdraw a bid prior to the auction process finishing. Don’t hesitate! You won’t get a second chance if your bid is declared the winner, so if you’ve made a mistake, withdraw it before it’s too late.
• Don’t be afraid to ask the auctioneer for clarification. They’re obliged to help where possible.
• Don’t be afraid to ask the auctioneer if the property is on the market.
• Become familiar with the auction process; it can be helpful to attend some dry runs and get a feel for how things work. The more comfortable you are in an auction situation, the more likely you are to get the result you want when the real thing comes around.
• Don’t be pressured by the real estate agent. The best attitude to have in property dealing is calm and rational.
• If the Auctioneer’s hammer/gavel comes down and you are the highest bidder, you are bound to go through with the purchase, no matter how regretful or silly you may think you have been, or how unfair the contract might be.
• Be prepared: it is crucial to see a Lawyer such as Lyons before the auction. We’ll be able to point out potential problems in the contract, to request amendments to the terms of the contract if you are the successful purchaser, and to go through check lists, including the “What If” list.
• As long as you are prepared, there is no reason an auction needs to be any riskier than buying by private treaty (as long, of course, as you stick to your budget and don’t get too caught up in the moment!).
• Before the auction, your Lyons lawyers will identify any terms that might not be in your favour and negotiate with the vendor’s lawyers to change them. We’ll also make sure that the property is as described and that there are no nasty surprises.
• If your bid is the winning one, and you’ve followed the points above, you can be sure the contract you sign will be in your interests.