Victoria’s property auction season is in full swing. When there are more buyers than properties, auctions enable vendors to sell for the best possible price. But many buyers find bidding at auction quite stressful, so let’s make it a little easier by explaining some of the auction sales jargon and giving you a few tips on how to win at auctions.
Auction terms you’ll hear frequently:
- Vendor(s): the vendor(s) is/are the owner(s) of the property being sold.
- Reserve: the reserve is the minimum price that the property will be sold for. If bids don’t reach the reserve, the auction is over.
- Conditions of sale: the conditions of sale are the terms the property will be sold under, such as the acceptable methods of payment, the settlement period and items that are included/excluded from the sale.
- Settlement: settlement is the date upon which the balance of payment occurs and the legal documentation is finalised, so the property legally changes hands from vendor to buyer.
- Fall of the hammer: when the auctioneer mentions the fall of the hammer, he means the last bid placed. An actual hammer may not be used; the auctioneer may use his hand to indicate that bidding is over.
- Passed in: if a property is passed in, it means the vendor’s reserve price hasn’t been reached so the property won’t be sold under the auction hammer. Sometimes sales are negotiated after auction however.
Tips And Tricks For Buying At Auction:
- Familiarise yourself with auction processes so you are comfortable and knowledgeable when it comes time to bid.
- Line up your ducks before auction day. Ensure your finance is approved, your deposit is ready and you have your building and pest inspection done.
- Stand where the auctioneer can see and hear your bids clearly.
- Bid in a firm, clear voice.
- Offer a different increment if you feel the bids are going too fast or too slow. The auctioneer may accept or reject your offer to raise the bidding by a lesser amount.
- Set a limit to how much you will spend, and walk away when you reach that limit.
- There is no ‘cooling off’ at auction, so don’t bid if you don’t have the required deposit available, or approval from your lender.
- Engage a buyer’s advocate to bid on your behalf if you’re not confident and there is a risk you won’t stop at your budget limit.
Chat to us about how a property advocate can help you sell or buy in the current market with confidence. Investment buyers can receive invaluable support and guidance through our Buyers Advocacy Service, and for landlords who are selling, our Vendor Advocacy Service helps vendors achieve outstanding results.
To book a free 20-minute consultation, simply click here and choose a time convenient to you.
