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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.

Contrary to popular belief, most sellers choose to sell their property through auction because it is simply faster and more convenient that the traditional route.

  • 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

Step One: Before the Auction

 


 
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  • 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 available.
  • 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.

Step 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.

Step 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.