Hammers do fall on good results

Auctions are more popular than ever, but buyers need to understand some important dos and don'ts to make sure they get the best results.

Due diligence upfront: Unlike sales by private treaty, auctions are unconditional. If the hammer falls and you have the highest bid, then congratulations, the house is yours - no ifs and buts. It's critical that you have checked out anything that might influence your decision to buy the house before you attend the auction. The two biggies are making sure the house is sound and that it is worth the amount of money you are considering spending, so ensure
that you have had a building inspection ($300-plus) and some sort of valuation; whether it's a full inspection by a registered valuer ($500-plus) or an automated estimate of value (an E-Valuer report from QV.co.nz will cost $30).

Do know what to expect: Make sure you have attended a number of dry-run auctions where other people are bidding for homes before doing it yourself for real. Experience is critical. Familiarise yourself with the protocols; how does the auctioneer open the bidding? What bid ranges are typical - $5k, $10k? How does the auctioneer indicate that the reserve has been reached and the home is now selling? Are vendor bids permitted?

Do expect pressure: Auctions are stressful affairs for most people (including the seller). Auctions are public sales arenas and participants understandably feel self-conscious and uncomfortable. Take some deep breaths and try to enjoy the proceedings. Remember everyone is in the same boat and going through the same emotions. Be prepared for the auctioneer's banter and for the agents to gently try and cajole you into increasing your bid should the bidding
stall below the reserve price.

To read the full NZ Herald article, click here

Posted: 14 Nov 2010

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