Buying at auction

Greetings Forumites

Ok, my first Sydney IP settles on Friday and I am looking at buying another property ASAP. I have decided on a specific NSW country town for many reasons. There are two ex-housing comission properties coming up for auction in late June which are in my price range. Having zero experience with the auction process, the fear is starting to grip me already :rolleyes:

Questions
1. How much money do I need to have on the day if my bid is successful? Will they accept cash?
2. Will pest/building reports be provided before the auction?
3. How long is the normal settlement period for auctions?
4. Can I still put an access clause in the contract do do some tidy-up/renovations b4 settlement?

I will remember to literally walk away immediately that the bidding gets above my pre-decided top price!

Please only reply to this post if you are an auctioneer or have yourself bought at auction in the past....

Regards,
Hobbo
 
Hi Hobbo
Queensland answers only...

1. 10% unless you negotate this earlier with the agent. I would suggest getting this % as low as possible or use a cash bond with your bank. You can also negotate this before the auction. The agent will be worried about getting their commision so put a cluase in the contract to cover them at settlement.
2. No. You need to do all your dillegence before the auction and yes if you miss out your money goes out the window.
3. 30 Days unless you negotate this before the auction. You can also negotate this after the auction if it passes in.
4. Yes if you negotate it before the auction. Not likley though in my experience.

I do not like auctions as all these problems can easily be delt with in a 'for sale' sale. Auctions IMHO do not help buyers or sellers and they are fraught with danger and emotions.


Hobo if i was you I would go and get some action experience NOW!

Regards

Brojac
 
Please only reply to this post if you are an auctioneer or have yourself bought at auction in the past....

Regards,
Hobbo

I am not an Auctioneer and i have never bought at a Auction, but in the last 12 months i have been to hundreds of Auctions and i have learnt a lot :D

Gordon Gekko
 
Originally posted by hobgoblin
Greetings Forumites


Questions
1. How much money do I need to have on the day if my bid is successful? Will they accept cash?

Usually 10% on the fall of the hammer, this should have been stated on the auction advertising for the property.
I'm sure if you've got CASH, they'll accept it.

2. Will pest/building reports be provided before the auction?

Not Usually, make your own enquiries prior to auction date.

3. How long is the normal settlement period for auctions?

Once again, this would have been advertised, sometimes there is optional settlement terms available e.g. 30/60/90 days

4. Can I still put an access clause in the contract do do some tidy-up/renovations b4 settlement?
Only by making prior arrangements with the agents/vendor, if they are agreeable. No good trying to add any clauses after the fall of the hammer.

I will remember to literally walk away immediately that the bidding gets above my pre-decided top price!
Determine your top price the day before the auction and do stick to it. Auctions create huge adrenalin rushes, take somebody with you to pull your arms down when you start getting carried away.
Please only reply to this post if you are an auctioneer or have yourself bought at auction in the past....

Regards,
Hobbo

I am an Auctioneer and have also personally bought and sold at Auction, I reckon the adrenalin rush on the Vendor is greater than for the bidders.

regards and good luck
 
Just on the Cash side Hobbo

Unless you want to arouse (I think I am going to be sick) the tax department never use more then $9500 IN ANY SINGLE CAH PAYMENT. I have been told that RA's are susposed to report large cah amounts or is it just banks either one! Regardless, the last thing you want to, is to be auditied!

Hope this helps

Brojac
 
Thanks Brojac, Jakk, asy,

That's really helpful information. If anyone knows of any NSW rules that wildly differ from the above info, do post them won't you? I'm going to hunt down more info from my bank, and the listing REA. Even if I decide not to bid on these properties, I might still go to the auctions, just to get a bit of experience - see what happens.

I wonder if solicitor's trust accounts are exempt from the $10 000 rule....it would mean a shitload of work for Austrac if they aren't.

Thanks,
Hobbo
 
Remember this is CASH (notes/coins) payments only. Cheques (even cash ones), credit payments, money orders & stamps (yes the 50c kind), would all be exempt from this.

Few people pay the deposit at auctions in cash - there's no gain in lugging the violin case around...may as well save the cash for when flashing it means a discount :)

Cheers,

Aceyducey
 
In chatting with a bank clerk (while they where writing out bank checks for a property), she told me that they do a lot of bank cheques on Friday, with no name on them.

The Asians then run around from auction to auction, on the chance they will buy (her words, not mine).

Jas
 
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