Advice for Bidding at Auction

The idea of bidding at auction can be a daunting one, particularly for first home buyers. More homes than ever are sold by auction so there is often little alternative for a buyer wanting to secure a particular property.

The first thing to remember is that the successful bidder will enter an unconditional contract, meaning no finance clause and no conditions other than those already in the contract of sale displayed. So if a lender is providing finance, the buyer needs to have approval prior to the auction. There is no cooling off period within 3 days either side of the auction date, so the contract becomes binding and unconditional upon signing.

Set an upper limit and stick to it. A lender will still need to do a valuation as part of the formal approval process and the price should reflect current market value.

And finally, if the property is passed in, the final bidder secures the right to first negotiation, the importance of which can’t be understated if the buyer is serious about securing the property. The reserve price is divulged to that bidder first and negotiations can commence
straight after the auction. The alternative is to potentially shut yourself out of contention post auction as the negotiations proceed with another bidder.

If we can assist you with any advice in relation to buying a home or bidding at auction please contact one of our experienced sales agents.

Until next week,

Nick Lord (Director)