Auctions are a popular medium for buying properties in Australia. In fact, many bank repossessed properties become available to the public through property auctions. But as with any home purchases in Australia, the government regulates the sale of homes through public auctions. People wanting to relocate to Australia may have an easier time procuring a home through an auction, whereas an investor may have more paperwork or obligations to meet in order to purchase through auction. Australia typically requires that foreign buyers get approval of their purchase first by the review board and that any purchases made my foreign investors benefit the community where the home is located. Once approval is granted, buyers are free to begin looking at auctions for deal on Australian homes.
Preparing for Auction
Although auctions are an alternative form of home selling, a buyer should still make preparations in order to facilitate a smooth auction purchase. When going the traditional route, buyers get together financial records, review the prospective property, and determine the price range they’re willing to work with when making a purchase. Buying at auction isn’t much different in terms of preparation.
Buyers need to finalise loan paperwork and have a certain percentage of the home price available. Since no one knows what a property will sell for at an auction, it’s best to have at least 10% of the highest amount you’re willing to pay available in the bank. Before the auction, be sure to visit the property you’re interested in and ask questions of the realtor or broker. Have an appraisal done if necessary and be prepared to have the house and property inspected.
At the Auction
Remember that when you arrive at the auction there may be just as many people interested in the same property as you. Be prepared for the auctioneer to overwhelm the crowd with excitement in order to get the highest price. The auctioneer is hired by the seller to go above and beyond the reserve price of the auction. Some auction experts recommend waiting until the house meets its reserve price before bidding, since you may be competing against a co-owner or vendor when bidding. Once the reserve is met, the vendor bidding and co-owner bidding may stop since both vendors and co-owners have vested interests in making sure the home reaches the reserved price at auction.
Bid until you’ve reached your predetermined stopping price. If you successfully win the auction, be prepared to hand over some of the winning bid immediately. If you fail to win the auction, have your agent or broker begin a new search until you find another property you like. Eventually, you should be able to utilise an auction to purchase the home of your dreams or an investment property that could fetch a great return.