Buying at Auction
A common way of buying property in Australia
An alternative to buying from an agent is to buy at auction, which has become popular in recent years, particularly when prices were rising.
Around 25 to 30 per cent of homes in Melbourne are sold at auction compared with around 20 per cent in Sydney, around 15 per cent in Brisbane and 10 to 15 per cent in Adelaide. The advantages are that sellers can sell quickly and buyers can usually save money (it’s most common in Melbourne and Sydney). However, it’s absolutely vital to do your homework before buying at auction, particularly regarding the market value of properties. Many auction houses quote a price 10 or 20 per cent below a property’s expected sale price in order to attract more interest, although in a sellers’ market many properties sell for much more than their reserve price. Property auctions are advertised in local newspapers and may be held on site.
If you aren’t in Australia or are buying in an unfamiliar area, you can engage an estate agent to find a house, bid for it at auction and negotiate the sale. Agents may charge as little as a few hundred dollars to bid at an auction or up to 3 per cent of the price if they conduct a search and secure a property. It isn’t wise to bid yourself unless you know the ropes, as there’s an art to bidding the right amount at the right time (and with the right degree of insouciance)!
It’s necessary to have your finance in place in advance when buying at auction, as you’re required to pay the deposit on the spot (usually 10 per cent) and close within a reasonable period. Cooling-off rights don’t apply when buying at auction.
Also in this section
- Introduction: An introduction to buying property in Australia
- Cost: What is the cost of buying a home in Australia?
- Title: Types of title
- Fees: Extra costs when buying property in Australia
- Estate Agents: All you need to know to deal with estate agents
- Buying at Auction: A common way of buying property in Australia
- Contracts: All there is to know about contracts of sale
- Conveyance: What is it and what does it entail
