In Australia, buying at auction is one of the most traditional ways of purchasing a home. But the method is fraught with many pitfalls, and if you’re not careful, you can end up making a costly mistake.
Auctions make light work of identifying a suitable home and can simplify a long and tedious house hunting process if done the right way. However, the way you bid and buy at an auction requires some preparation – pretty much like an exam. You must have done some market research beforehand and also have some acumen when it comes to the bidding process. Having the right amount of finances is crucial.
Elie Kaltoum, a Sydney western suburbs Real Estate principal, says your best shot at success starts by watching some auctions. Make a point of arriving half an hour before the commencement of the auction to give yourself time to inspect the property and take one last look at the sales documents. You then have to register with the auctioneer, provide your ID and get a number for bidding. The seller usually sets a reserve price which must be reached before the property can be sold at the auction.
It’s also imperative to have finances ready because, unlike private treaty sales where the price is fixed, when it comes to auctions there’s no cooling off period- the winning bidder must settle the contract when called upon to do so.