An auction is a public sale conducted by a licensed auctioneer and is governed by strict rules. There is a Reserved Price, which is essentially the minimum the home will sell for.
There is no cooling off period for auction. Before the auction, try to attend as many auctions as possible to understand how the process works. Get a feel for the difference between what an agent quotes as the expected price and the actual selling price.
When you find a place you like, get a contract from the agent and have a solicitor or conveyancer check it, and read it yourself. Make sure you decide on the maximum amount you will pay for the property as well as getting your finance formally approved.
An auction is usually held on site at the property. Before you bid, you must register with the auctioneer, providing your details.
The auctioneer starts proceedings by explaining the contract, terms of the auction and a description of the property. The auctioneer will call for opening bids and encourage bidding to reach, and possibly exceed, the vendor's reserve price. When the hammer falls, the property will be sold to the highest bidder or passed in.
During the auction, bid firmly. You do not have to agree with the auctioneer's suggested bid. Make sure you do not go past your limit.
If you made the highest bid after the property was declared 'on the market', congratulations, you've bought yourself a property. The agent will take you somewhere quiet to finalise the paperwork. You'll have to hand over the deposit at this point and sign the contract right there and then. If the property did not reach the Reserve Price and is passed in, you can negotiate providing you were the highest bidder.
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