Professional Advice by Mitchell Lambert, Lambert Willcox Estate Agents
If you are thinking about buying or selling a property at auction, here is some essential advice from an experienced real estate professional and auctioneer explaining the process from start to finish.
Auctions are very simple.
I usually arrive 20–to–25 minutes before, I’ll greet the agent, I’ll greet the owner and then I’ll have a brief walk around the property. Usually 24–hours prior to the day, I’ll have contacted the agent or owner to find out the estimated sale price, the likely reserved price and how much interest they have had leading into the campaign. Also, the level of market feedback and how many offers (if any) have been presented to the owner prior to. I like to be nice and informed prior to arriving on the day.
On the day, I will re go over my numbers and usually get handed the reserve letter.
It is common for owners to change their mind overnight. A misconception with the reserve price, you are legally required to set a reserve in Queensland. If you don’t, by law you have to accept the highest bid on the day, even if it is a dollar. So, it is in your best interest as an owner to set a reserved price.
A property auction is not a high-pressure environment for buyers, in fact, it is quite the opposite.
It is a very transparent, open and calm environment. I advise buyers that if there is any point that they are unaware of the bid, unaware of the amount of the bid or would like to reduce the amount that they are about to bid, to please be open with me about that.
Usually, five minutes before the auction we advise them that it is about to begin and where it will be conducted, a brief summary of the terms and conditions of the contract and remind them that they need to be registered. Again, I meet with the agent to get advised on the number of bidders and who I should be looking for.
We start on time, on the dot.
We read out the terms and conditions of the sale. You don’t legally have to, but we do it as a courtesy to the buyers to ensure that there is no confusion. Usually, open with a bit of discussion about the property, and then we open the floor to bidding. This is where the buyers nominate a figure or alternatively I will nominate a figure, at which we will enter into a negotiation with the owner.
From there, two options may occur: the passing in or the sale.
When the property is passed in, it means that the bidding has not reached the reserved price. If the property is sold under the hammer, the highest registered bidder that has won the property must fill out the nominated forms on display.
However, when they register to bid, they do warrant their ability to enter and complete the contract and I may sign on their behalf as the auctioneer and also on behalf of the seller. This is very common with deceased estates, mortgage and bankruptcy sales.
If you’re interested in trying to buy or sell a property at an auction, there’s a lot to learn. It’s important to be extremely well-educated about the process and about the properties you are interested in bidding on.