Why purchase property at auction? Isn’t
it confusing? Not at All! Real estate auctions are a simple and convenient
way to purchase property. It allows you to purchase property at fair
market value (rather that the often inflated prices of traditional real
estate sales). You also compete fairly with all potential buyers at
the same time, without any lengthy negotiation periods.
to popular belief, most sellers choose to sell their property through
auction because it is simply faster and more convenient that the traditional
- Properties are
purchase at fair-market value through competitive bidding
- You know the
seller is committed to sell
- Buyers determine
the purchase price
- Auctions reduce
time to purchase property
- Auctions eliminate
long negotiation periods
- Purchasing and
closing date are known
- Buyers know
that are competing fairly and on the same terms as all other buyers
One: Before the Auction
- Review the bidders
packet on the property.
- After looking
around the property yourself, you may want to consult other professionals.
A home inspection will advise on the condition and value of the property
and may also suggest certain inquires you should make, other specialist
report you should obtain or indicate expenses you may face over repairs.
Consult your financial institution to ensure you have financing/funds
- Check what methods
of payment the auctioneer will accept for the property. If you are
the successful purchaser, you will usually be required to pay a percentage
deposit immediately after the sale and should therefore have sufficient
funds to cover this. It may be necessary, for example, to make arrangements
for a banker’s draft prior to the sale.
- Register as
a bidder on auction day. You must be 18 years old to register and
provide photo D.
- If you have
any inquires on the day of the sale, ask the auctioneer or a Macarro
Auction Company staff member.
Two: During the Auction
- Listen carefully
to the opening remarks of the auctioneer. Amendments may be announced
which directly affect the property in which you are interested.
- Most properties
are subject to a reserve price below which the auctioneer cannot sell
the property at the auction. It will be made clear whether the property
is being sold subject to a reserve in conditions of the sale, although
the reserve price will not usually be disclosed.
- As the auction
opens on the property of interest, offer an opening bid, often this
in not your top price, but a starting point. Several people may be
bidding at first, but as the price increases, most will drop out.
Each time a bid is recognized from another person, you must decide
whether or not to continue bidding. If your answer is yes, hold your
bid number card or your hand in the air. Do not hesitate to call out
your bid if you think your bid was not noticed. Auctions move at a
fast pace and if you let yourself go unnoticed, you may miss out on
the winning bid.
- It is a popular
myth that the auctioneers mistake any casual movement for a bid. Do
not worry, auctioneers are able to distinguish between someone scratching
their head and bidding, but if for some reason a mistake is made,
tell the auctioneer right away; do not wait until the end of the sale.
- If you are the
last and highest bidder at the fall of the auctioneer’s hammer,
you are the successful purchaser and are legally committed to pay
the price you bid and complete the purchase.
Three: After the Auction
- No one can outbid
you after the sale and the seller is bound to legally complete the
sale under the terms stipulated in the contract.
- You will normally
be required to close the transaction within 30 days.
- The auctioneer
will require you to sign paperwork and provide your deposit before
leaving the premises.
If the property
remains unsold after the auction speak to the auctioneer to register
your interest before leaving. It may be possible to buy the property
by private treaty at a price that is agreed to with the seller.