Navigating the world of auctions

x_157_88001_0_14094812_300Auctioning is one of the most popular ways to buy or sell a home. Despite this, your average buyer or seller doesn’t tend to know a terribly large amount about the process. No matter what side of the fence you’re standing on, it can’t hurt to get yourself up to speed with some of the basics.

What’s a reserve price?

The reserve price is the minimum amount of money the property can be sold for. It protects a seller from getting an unfairĀ deal due to the whims of the day, and is secret.

What happens if the bidding stays below the reserve price?

If the bidding never goes past the seller’s lowest total, then the property is passed in. Typically what will happen next is that the seller will negotiate directly with the buyer who made the highest bid. If that falls through, she or he will go for the next highest, or perhaps put it back on the market.

Can anyone go to an auction in New South Wales?

In theory, anyone can. However, you can’t simply turn up to an auction and start bidding. You’ve got to register by giving the seller’s agent your name, address and identification. In return, you’ll receive a bidder’s number.

What kind of identification do I need?

You need any document or card from a government or financial institution that shows your name and address – a driver’s licence, or perhaps a bank statement for example. Otherwise, you need two that will combine to display this information.

What happens if I win? Can I back out?

Certainly not! With an auction, there’s no cooling-off period – the five-day waiting period you get after buying a home through private sale when you can cancel the contract. Rather, when that gavel is banged, the property is legally yours, so you need to have the required funds.

As the buyer, you’ll need to then sign the sale contract and pay the deposit, which is generally 10 per cent of the sale price.

As the seller, should I sign the contract immediately?

Rather than jumping in straight away, it’s more beneficial to wait. You’ll want to make sure the deposit has actually been paid and gone through.

How do I organise an auction?

The easiest way would be to seek out the services of Laing+Simmon’s auction services. We can provide you with professional and experienced auctioneers who will be your stewards through the whole process. They will also work for you and aim to get you the most beneficial price possible.

Leave a Reply

Your email address will not be published. Required fields are marked *