Buying at auction avoids the often prolonged waiting of the traditional offer/counter-offer negotiation process and uncertainty of what another buyer may be offering, particularly when you experience a Multiple Offer situation or Tender. During an auction bids for the property are called in an open arena on a given day and time. If your bid is accepted you’ll have the satisfaction of knowing you have purchased at true market value.

An auction is an exciting experience where everything is out in the open in a very transparent environment. You can see your competitors and have confidence that others place similar value on the property as you. Let us know if you are interested in an auction property so that we can register your interest, provide you with all available Auction documents and keep you informed if a pre-auction offer is made and give you the opportunity of bidding if the auction date is brought forward.

Frequently asked questions about buying at auction

Q1. Do I have to have cash to bid?

Yes. To bid at an auction you need to acquire pre-approved finance so that you can bid with no conditions of sale. You may need to inform your lender or Mortgage Broker that you intend to bid at auction as they may have additional requirements before you are able to bid. We always recommend seeking legal and financial advice prior to bidding at Auction. A 10% deposit is required on the day of auction; the balance due on possession date. However it is sometimes possible to extend the possession date to allow you more time to organise your funds or sell an existing property. Talk to your consultant about this so they can discuss with the vendor and attempt to arrange this with the sellers and auctioneer. In addition to pre-approved finance, bidding in an unconditional position means that you have completed all your due diligence on the property. You may wish to view / order a LIM Report, complete a Builders Inspection and as above and as mentioned above, seek legal advice.

Q2. I want to buy a property at auction but I have a house to sell

There are two options. If you are in a sound financial position you may organise a bridging loan. This will provide you the finance needed to buy the property at auction without first selling the property you currently own. The other way, as mentioned above, is to agree with the owner prior to the auction to buy on a longer settlement date, giving you time to sell your house before you need to pay for (settle) the house you intend to buy.

Q3. How do I find out how much the property is worth?

The more property you inspect in the area the better you will become at determining approximate values. If you need help ask your consultant for guidance. They can refer you to homes of similar type and price for comparison. You may also opt to pay for a registered valuation. Remember pricing real estate is not an exact science as come auction day what the seller needs to move on and the emotional desire of other bidders will determine the end selling price. We recommend you arrange a little extra finance just in case.

Q4. Can I make an offer before the auction day?

Some owners may consider selling before auction day, some may not. Usually the offer would need to be a very good one to convince a seller not to hold the auction on the scheduled date. If an acceptable pre-auction offer is tabled all interested parties are contacted and given the opportunity to also bid if the auction date is brought forward.

Q5. What contract do we sign and what are the standard conditions?

The auction contract is available prior to auction for your perusal and to take advice from your solicitor. At Harcourts we use the form prepared by the Auckland District Law Society and the Real Estate Institute of New Zealand and used commonly throughout the country. The usual requirements for the purchaser at auction are:

        1. 10% of the purchase price paid as deposit (either by cash, cheque or Internet payment).

        2. Settlement on the date nominated by the seller prior to the auction.

Q6. What if I need a LIM report?

We request our vendors to provide a LIM on auction properties. In most instances these are available from our sales consultants throughout the marketing campaign.

Q6. What is a seller or vendor bid?

The conditions of sale state the seller has the right to bid themselves. This can be compared to a counter offer during private negotiations. This bid may be used by the auctioneer to start the auction or bid during the auction. The auctioneer will disclose all vendor bids and will not bid on behalf of the seller once the property’s reserve price has been reached, that is a price sellers are prepared to sell for.