A real estate Auction is the process of buying and selling property by offering it to bidders at a forum conducted by a licensed auctioneer.
The property will be sold to the bidder who makes the highest offer, if it is more than the "reserve price".
The more common method of selling is through sale by private treaty, but it is not the only way…
THE AUCTION PROCESS:
Before an auction commences the seller will usually set in wrting a minimum sale price, called the "reserve price". The auctioneer is not permitted to sell the property below the reserve price and it is not revealed to prospective buyers before the auction.
The auction is generally opened with the auctioneer announcing the attributes of the property, and any relevant details such as restrictions on the title and the deposit required. The auctioneer then calls for, or announces, an opening bid, usually below the reserve price.
When the reserve price has been reached or exceeded, the auctioneer will usually indicate this by saying "this property will sell today"
The person who makes the final bid must then complete the transaction by formally signing their offer to buy.
When the property is sold at auction, the settlement process is the same as that used when a home is sold by private treaty.
PREPARATION IS ESSENTIAL
If you have decided you wish to bid at an auction, it is recommended that you have prefinance approval and have developed a good understanding of what the property is worth – our professional, qualified Property Consultants can assist you with this.
Auction sales are generally not subject to finance. You will also need to have available the amount of the deposit (usually 10% of the purchase price)
Thoroughly inspect the property prior to Auction, do your own checks on the property through the local council or other relevant authorities and ask your Property Consultants any questions you have about the property.
For more information, please call your nearest Stocker Preston office
Click HERE for the Department of Commerce "Real Estate Auctions" fact sheet