Auctions ???

So, viewed a house today that's up for auction in 1 week.

Was not our plan to buy at auction, but like the house.

We have a home loan offer in writing for past few weeks, but they advised

to avoid auctions ! . We will be funding with a 50 % deposit.

So, what to watch out for and how does the process work ?

Agent has not stated settlement terms as yet.

We are in VIC

Buyer beware!!!!!!!!!!!!!

Best advice if you enter bidding....reduce bid increments as quick as possible, set yourself a limit and don't exceed it AND don't get emotionally involved.

Have you asked if they will accept an offer and possibly sell prior to auction. I have seen that happen before but dont know the in's and out's

Cal x

No they won't sell prior. Bereavement sale.

Do not start the bidding. Keep out of it until the bids slow right down and they are calling for last bids. If it is still in your price bracket, chuck an extra $50 on top of the last bid, and take it from there. If the agent says that he is only accepting minimum bids of say $500, tell him that your $50 extra still stands. Play your own game, not the agents. Good luck with it. Keep us posted on how it goes for you.

Do not start the bidding. Keep out of it until the bids slow right down and they are calling for last bids. If it is still in your price bracket, chuck an extra $50 on top of the last bid, and take it from there. If the agent says that he is only accepting minimum bids of say $500, tell him that your $50 extra still stands. Play your own game, not the agents. Good luck with it. Keep us posted on how it goes for you.

Great advice.

Auctions are an agents game, nothing more. The vendor will have a reserve usually unrealistic and set by the agent. Most people at auctions are there to be nosey. You need to register your intention to bid with the agent prior to the day, if the auction is slow then there can be an advantage to yourself to allow the property to be handed in, just make sure your the highest bidder meaning negotiations begin with you. CLARIFY YOUR POSITION WITH YOUR BANK as payment terms are ruthless.

Set your limit, some auctions fly and the auctioneer is there to stir up bidders to achieve top price i.e., they are not working for you in fact they simply want your money and will employ any tactic to get it.

Dont set your heart on this property, if you get it then congratulations, if not then always next time.

Take a builder or somebody with building experience with you for advice, strictly bought as seen, termite infested, rotten, subsiding, asbestos containing etc or not.

Bst of luck.

S

So agree with all of these comments. Auctions today are not aimed at first time buyers these days, due to the way they can keep pushing up the price and the current state of the housing market here. Also the seller has this set price in their mind due to the inflated housing market and not prepared to drop.

Watched a few TV programs since I have been here and you see unrealistic sellers who want more than market value as that it what they think it is worth. Thus will not let it "go on the market" till they reach that magic figure. They are not prepared to sell unless it reaches that magic figure they have in there mind.

Then read forums where investors feel pity for first time buyers, who have a set limit whereas they do not as the banks will just lend them the extra money so they cannot compete on a level playing field.

I have listened to 3 auctions, 2 on my block and one on a previous rental. Started very low, auctioneer kept pushing the price up and calling the going once, going twice but never finalising and he kept pushing it up.

Should be illegal the way they work.

The two in my current block went for over 200k the starting price.

I even had been in both of them, and they both need a complete refurb. The price they sold for was not even relative to what they were worth and the amount of work needed to make them actually livable, based on my standards coming from the UK.

I have seen some truly shocking rental properties here in Australia, some are not fit to be put on the market. But due to demand, someone will take them.

Best bet go to a few Auctions to get a feel and how they work, as it will give you a better idea. Depending on the city/suburb/property you will more than likely see local/foreign investors as opposed to first time buyers, who are getting more and more priced out.

Good luck and I do hope you can find something.

We bought our house in Bayside, Melbourne at auction just 6 months after we arrived from the UK and it was the best decision we have ever made...(and luck was on our side, we sold in the UK before we left and exchanged our £s just before Brexit vote..)

Our mortgage broker did the actual bidding for us as we were nervous to go too high ourselves, worked out well, so if you can find somebody who can do the bidding for you! The agent had no idea who our broker was bidding for as we stood across the street amongst the neighbours...

The property was listed for $870k to $970k, which everyone knew was way too low, people estimated it to go for $1.3M, turned out the reserve at auction day was $1.1m....the marketing campaign failed terribly as all other bidders were out at $1m, and local people thought it would go too high so they went to other auctions (they are all at the same time for some silly reason), so we had a steal at $1.1m! Well, sort of...a fixer upper for over a million was not what we expected after selling our nearly new property in the UK for less than half that :-(  but we had a building inspection done prior to auction and thought it worth the risk....

We have since renovated the property (spend $150k) and it was this week valued at $1.5m, market value $1.7m, not bad for one and a half year. Property prices here are rising much faster, and rent is high ($800 to $1400 per week in our area) so get in while you can, I would say.

Auctions are scary, unpredictable and not for the faint hearted...you have to balance your expectations and reality, and you need to be invested enough to go for it, and not too invested so you know when too walk away...and remember, at the end the property goes to the person willing to spend the most money on the day!

Good luck!

You need to get a building inspection done and a conveyancer to review the contract. If you win at auction you have to pay the deposit within 24 hours and you won't  be able to renegotiate the price if there are any issues.

While some states have cooling off periods these rights are often waived in Auctions and you or preferably  a conveyancer need to read the smallprint.

Also look out for building certificates if it looks like any work has been done. These should be in the contract as should the settlement date. The agent does not set this.