It might be your first time buying property, or perhaps you’ve previously bought via another method. Whatever the reason, if you’re not sure what buying at auction involves, it’s important you know what to expect before walking in. Buying Gold Coast property at auction has its own unique set of rules, regulations and guidelines – you don’t want to miss out on a property you love because you weren’t prepared on the day.
Here’s what you need to know before you buy property via auction.
1) You need to be registered
Before you can get bidding, you need to be registered with the auctioneer. That means you’ll have something to identify you as the bidder – like one of those paddles you see on television shows. You do need to show some form of identification to complete registration.
2) The auctioneer must abide by certain rules
The auctioneer needs to have a license to host the event and they must display or announce their name before bidding commences. At the auction, they must also:
- Confirm how much deposit is required.
- Announce any details about property inspections.
- Make the audience aware of anything else important – such as changes to the contract.
3) No cooling-off period
The winning bidder at a Gold Coast property auction is required to sign the Contract of Sale and pay the deposit on the day – there’s no changing your mind afterwards.
This makes it’s really important you have a clear idea of your budget before you begin bidding. If you win, you will be tied to paying the money.
Visit the property in-person, carry out necessary inspections and familiarise yourself with the terms and conditions of auction in advance. Be aware that inspections or getting answers to your questions can take time, so it’s wise to start making enquiries at least three weeks in advance.
4) No conditions allowed
Auctions usually don’t allow bidding with conditions. If you’re not in a position to buy there and then, don’t bid. In practice, this means that if you need to sell your current property or arrange alternative finances before you can afford to buy your next – you can’t bid at an auction.
Before you arrive at a property auction with the intention of bidding, it’s recommended you:
- Seek legal advice and get a copy of the contract.
- Get your finance arrangements together – including knowing what you’ll need to pay when and by what method.
Remember, it’s illegal for a price guide to be published ahead of an auction, which makes it even more important you do your own research and know your limits. Don’t let yourself get carried away by the excitement.
5) Understanding the reserve price
A reserve price exists to protect the vendor from selling their property for less than they are willing to accept. An auctioneer must not announce what the reserve price is, but they may disclose that a reserve price has been set.
If there is no reserve price set, the property is classed as ‘on the market’ from the beginning of the auction. However, if there is a reserve bid, the property is only ‘on the market’ once the reserve price is reached, and the seller must then accept the highest bid made.
Should bidding fail to reach the reserve price, sellers can accept a lower offer or choose to sell the property by private treaty. Negotiations can begin immediately, and if an agreement is reached within two days, there is still no cooling-off period.
To find the perfect home and get your bidding underway, contact our property experts at Ray White Surfers Paradise today.