Auction hints for buyers

The procedure is simple

At the nominated and advertised time and place, buyers are invited to submit offers in the form of bids.  The seller sets a reserve price and bidders compete to offer the highest price.  Having reached or exceeded the reserve, the buyer can then be confident the property's true market value has been established.

Do your homework first

• If you are unsure about bidding at an auction, you may wish to engage the services of an experienced auctioneer or a member of the Society of Auctioneers & Appraisers or the Real Estate Institute of South Australia, who is independent of that particular auction.  They will be happy to act on your behalf for an appropriate fee.
• If you are interested in a particular property, register your interest with the selling agent so that you can be kept informed in the event the property is to be sold at short notice or prior to the auction.
• Attend other auctions to familiarise yourself with the procedures.
• Have an expert (eg a builder, an architect, an independent real estate agent or auctioneer) check the property before the auction if you have any concerns.
• Check the proximity and availability of all the services or facilities that are of importance to you (eg schools, shopping, access to public transport etc).
• Compare property values in the area by monitoring local advertisements and sales.
• Organise your finance.  With adequate notice, most banks and lending institutions will inspect and/or approve your finance prior to the auction.
• Should you need to sell a property to purchase at auction, discuss this prior to the auction with the selling agent or the agent you have engaged to represent your interests.  It may be possible to arrange with the seller for an alternative settlement date.
• Prior to the auction, check the deposit required (usually 10% of the purchase price), the contract, the settlement details and the Section 7 Statements* with the seller's agent or the agent you have engaged to act on your behalf.
• Determine the price that you are going to pay.   Set your price limit for the auction but be prepared to stretch yourself beyond your initial limit if you really want to acquire the property.
• Be sure you know the time and date of open inspections and the auction.  Give yourself time to look through the property more than once and satisfy yourself that the property is right for you.
• When bidding, ensure that you position yourself where the auctioneer can see you.  At the appropriate time, get the auctioneer's attention by either calling out your bid, waving your hand or nodding your head.  It is recommended that you make an early bid to ensure the auctioneer is aware of your interest.
• Note that there are no "cooling off" rights when a property is purchased at auction or on the same day, if you bid at the auction.
• When the property is "knocked down" to you as the successful buyer, you will be required to sign the contract and pay a deposit, which is usually 10% of the purchase price.  A personal cheque is usually acceptable.
• If bidding does not reach the reserve price, the property is "passed in".   If you have been a bidder, the auctioneer may invite you to negotiate.  The highest bidder will normally have the first right to negotiate.
• Be positive - bid with confidence!
• If successful, it is recommended that you immediately arrange suitable insurance cover protecting your interest in the property.
• You will also need to nominate a solicitor or registered conveyancer who will act and attend settlement on your behalf.
• Access to the property is not usually given until settlement is completed.
• The auctioneer or selling agent will be happy to answer any further questions prior to the auction.

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