Bidding at Auction in Brisbane – What you need to know!
Bidding at Auction in Brisbane can be a stressful and emotional experience for homebuyers and investors alike. Your Property Hound is a local Buyers Advocate that provides an auction bidding service for property buyers in Brisbane. Your Property Hound has put together this guide to help prepare buyers for auction day!
Before the auction
When bidding at auction in Brisbane, preparation is definitely the key! If you are unfamiliar with the auction process try to attend as many as possible. It is especially helpful to find out who your auctioneer will be, and attend several of their auctions so that you are familiar with their style and process.
Bidding at auction in Brisbane is on an ‘unconditional’ basis. This means that all necessary checks and due-dilligence need to be performed prior to auction day. Cooling-off periods do not apply to properties purchased by auction in Brisbane.
Some things to consider include:
- Perform an independent building and pest inspection. If the property has a pool then also consider having a specific pool inspection performed.
- Obtain a copy of the title search and contract of sale for review by your solicitor. Investigate any easements, caveats or covenants as necessary.
- Perform councill or town planning searches as necessary. Performing a flood search is particularly important in Brisbane.
- If purchasing a strata titled property then perform detailed searches of body corporate records.Ensure that your finance is sorted. Contact your bank or broker to check that you have pre-approval in place. This will often require a bank valuation prior to auction.
- Determine the property’s value and your maximum bid. Knowing what you are prepared to spend before the auction will reduce stress and indecision on the day.– Review recent sales of similar properties in the surrounding area.– Check the sales history of the property, and any previous sales campaigns or price indications
– Research market conditions in the area. Look for statistical trends in how quickly properties are selling, and the typical level of discounting in the area.
- Ask the sales agent how much deposit is required (typically 5-10% of the purchase), and how and when this money is payable. (Most agents Also will accept bank ir personal cheques, and funds transfer)
- The settlement period may be fixed or negotiable (usually between 30 and 90 days). If you have a preferred settlement date then reach an agreement with the agent prior to auction
- Discuss any possible amendments (such as inclusions/exclusions) to the contract with the sales agent.
At the auction
- Make sure that you register your intention to bid prior to the auction. You will need to provide photo identification, so bring a current drivers license, passport or similar. You can also nominate a third party to bid on your behalf. Be wary about bidding by phone, or via a representative from the sales agents office. Professional and independent auction bidding services are available in Brisbane.
- The auctioneer will provide you with a unique identifier such as a numbered paddle.
- Position yourself so that you have a clear view of the auctioneer and other bidders.
- The auctioneer will begin the auction by outlining relevant terms and conditions.
- The auctioneer will then request an opening bid, or if none is provided they may suggest an opening bid, or make a bid on behalf of the vendor. The bidding will move in increments of $50,000, $10,000 or $5,000 (depending upon the value of the property) until the bidding slows, then it will usually progress smaller increments.
- Once the reserve price has been met, the auctioneer may announce that the property is ‘on the market’. This means that the auction will result in a sale.
- Your bidding strategy will depend on the amount of competition and should remain flexible throughout. All bids should be made clearly and without emotion.
- As bidding slows the auctioneer will often announce ‘first call’ and ‘second call.’ This is often used as a tactic to create a sense of urgency and to procure additional bids. Remain calm and confident. The property will not be sold until they call ‘final call’ and ensure that the crowd is ‘all done and all silent.’ You will therefore get ample opportunity to make a final bid!
The Winning Bidder
If you are successful bidding at Auction in Brisbane, you must sign a contract immediately following the auction and pay the deposit. When buying at auction in Brisbane no cooling-off period applies.
The property is passed in
If the reserve price at auction is not achieved then the property will be ‘passed in’. Private negotiations will then ensue. The auctioneer or agent can then negotiate with any or all interested parties.
NB. If a registered bidder negotiates a purchase within 2 business days of the auction then no cooling-off period applies.
In Brisbane, auctioneers can accept bids on behalf of the seller. These are known as ‘vendor bids’, and can made under the following conditions:
• Vendor bids can only be made up to the reserve price
• The auctioneer must announce if a bid is a vendor bid
A false bid made by the seller, their family or friends, or a ‘planted individual’ are known as a ‘dummy bid’. Dummy bids are illegal in Brisbane.
Bidding at auction in Brisbane can be a daunting prospect for the inexperienced, or those unable to attend auction day. If you are interested in using a professional auction bidding service in Brisbane, then feel free to contact us. Your Property Hound is local to the Brisbane area and provides a range of services for homebuyers and investors.
Additional information on Bidding at Auction in Brisbane can be found at the Queensland Government website.