A property auction is a fast-paced, public sale. The property is sold to the buyer with the highest bid after the seller’s reserve price is reached.
Let the agent know if you want to bid for a property at an auction, your first step is to let the agent selling the property know that you are interested.
Before the auction
Auctions are unconditional, so you need to learn as much as you can about the property prior to the auction or before making a pre-auction offer. Ask your lawyer or conveyancer to review and help you
understand any information you get before the auction.
- Confirm your finances.
- Do a title search.
- Get council information.
- Check the house, land and neighbourhood thoroughly.
- Get a property inspection report.
- The deposit amount that the successful buyer must pay
- The settlement date (the date the remainder of the sale price is payable and the keys are handed to the new owner).
Confirming your finances
Because auctions are unconditional, you need to confirm your finances before you attend the auction. If you win the auction, you will usually need to pay the purchase deposit on the auction day. Your lender may want to know specific details about the property before you attend the auction, even if you already have pre-approved lending.
Planning to bid if you can’t attend the auction
If the auction is going to be held in person and you aren’t able to attend, there are a few ways that allow buyers to still place a bid.
Understanding the pre-auction offer process
- A pre-auction offer is an offer that is made before the auction date.
- If the seller is willing to accept the offer, the auction may be held earlier than the advertised date, or the auction may be cancelled if a sale and purchase agreement is signed.
- Sellers may signal that they are willing to accept a pre-auction offer by including the words ‘unless sold prior’ in their advertising. This doesn’t mean that it won’t be sold ahead of an auction if this wording isn’t included — a seller can choose to sell by signing a sale and purchase agreement at any stage in the selling process.
- If you’ve spoken with the agent and registered your interest in the property, they should notify you if another buyer makes a pre-auction offer and the offer is accepted by the seller.
- If you haven’t registered your interest, you won’t be notified.
- If the auction is held earlier than advertised, the pre-auction offer the seller has accepted becomes the first bid at auction (the reserve price). The property can sell any time after that first bid.
- If you want to make a pre-auction offer, speak to your lawyer or conveyancer and the agent selling the property.
- Make sure to also check the auction’s terms and conditions to understand you can’t withdraw your pre-auction offer as it will become the first bid when the auction starts.
