Tips for Sellers – Steps to take before Auction
Unlike private treaty sales, where the price is negotiated between buyer and vendor, auctions move quickly and when the hammer falls the sale is final. In fact the bidding can all be over within a matter of minutes. At auctions, the property is sold to the highest bidder and there is no cooling off period. As a buyer, you may feel under intense pressure to bid, so the key is the be prepared and know your limits.
1. Do your research
If the property you want is going to auction and you have not attended one before it can be a good idea to attend other auctions and watch in the lead up to your auction. It will give you an idea of how they run.
2. Arrange loan pre-approval
To be able to purchase at auction it is best to know that your finance is approved. Bidding at auction without finance approval is very risky. If you have pre-approval you can be confident in your bidding and also have an idea of what your limit will be.
3. Know your limit and stick to it
Getting your pre approval will give you an idea of what you can afford. It is important to only pay what you think the property is worth based on other recent sales in the area.
4. Register to bid
It is a requirement in NSW that you are registered to bid. If you are unable to attend the auction in person you can have a friend or agent bid on your behalf. You can register prior to the auction day however it is common to register on the day.
5. Get your deposit ready
If you’re the winning bidder on the day, you’ll be required to pay a deposit of 5-10% of the purchase price on the spot. You must have this ready to go, usually in the form of a bank cheque.