Buying at auction: Tips & advice
If you're planning on buying at auction, the REIQ strongly recommends securing pre-approval for your finance and organising a building and pest inspection on the property beforehand.
Buying at auction in QueenslandWhile the numbers of homes sold by auction in Queensland may only be relatively small when compared to Sydney and Melbourne, it is an increasingly popular method of sale that requires buyers to fully understand the process.
A very important part of the auction process is that the successful bidder on auction day will be required to sign the Contract of Sale and pay the required deposit on the spot. There is no cooling-off period when you buy a residential property at auction in Queensland.
Open house days and inspections by appointment are the best time to make enquiries, get a copy of the Contract of Sale, take a good look around the property and clarify particulars.
It is also the time when building and pest inspections should be conducted. A reminder though - inspections can only be carried out with the permission of the owners and will be at the prospective buyer's cost.
The REIQ recommends buyers consider obtaining inspection reports, as properties sold under the hammer are unconditional. It's also important to arrive early on auction day. This gives the buyer the chance to review the terms and conditions of the auction and make sure there are no late changes to the Contract of Sale and get themselves ready to bid.
The auction processThe auction process itself is strictly defined by legislation to ensure fairness for both buyers and sellers.
Legislation requires all people buying at auction to provide their names, addresses and proof of identity prior to bidding. This information must be provided for a bid to be accepted during an auction.
The bidder will be provided with a number, which must be displayed if you make a bid during the auction. It is important to remember that you don't have to bid just because you have registered, but you must be registered if you intend to bid.
Some tips on bidding at auction include:
- Ensuring the auctioneer can see you
- Holding up your bidder number and calling out your bid in an audible voice
- There's the option to call out an exact amount, or indicate the increment you wish to increase the previous bid by (this increment may be suggested by the auctioneer)
It is also important to keep to your budget during the auction because if you are the successful bidder, you will be the new owner of the property.
DISCLAIMER: The information contained in this fact sheet is provided for general information purposes only. The information should not be used or relied on as a substitute for legal advice. If you require legal advice concerning a specific fact or situation, you should seek independent legal advice. REIQ accepts no liability or responsibility for any loss occurring as a result of anyone acting or refraining from acting on the basis of the information contained herein. Whilst REIQ has taken all reasonable measures to ensure that the information contained in this fact sheet is correct, REIQ gives no warranty and accepts no responsibility for the accuracy or the completeness of the information.
Read more about property investment here.