Auction tips and tricks: do they differ state to territory?

It’s a common sight to see ‘for sale’ signs on houses with an auction date all across Australia. House auctions have become popular in major cities in recent years, especially with property prices on the continual rise.

Buying a home may be a stressful journey - add attending and trying to win you home through auction into the mix and it becomes even more difficult.

Before learning how to win an auction, there are a few rules you should know:

• Dummy bids, non-genuine attempts to raise the bidding, are illegal.
  
• Auctions do not have cooling-off periods.
  
• A deposit is paid immediately after the auction sale.
  
• The property is on the market when the bidding reaches a vendor’s reserve price.

Here are a few tips and tricks to make buying a new home slightly easier.

Pre-auction tips for all states

• Get a pre-approval: Before attending any auction, it is best to have your home loan pre-approved. That way you know how much you can afford to bid and not go over your limit.
  
• Book an early inspection: Due to the nature of auctions, you cannot back out from the agreement if you win the auction. So it is best to inspect the property before the auction date.
  
• Attend auctions: Before you start entering the bidding war, consider going to auctions of properties you are not interested in to understand how the whole process works.
  
• Ask questions: While at the auction, be sure to ask the agent if anything has changed to the contract and the property since the time you last inspected it.

Auctions in New South Wales, Queensland, South Australia, Tasmania, ACT, Northern Territory

In general, most states and territories follow the same general auction rules. Most of the rules that differ from regions are geared towards agents and vendors. As a buyer one of the key things you must check is if you need to pre-register for an auction and how. 

In NSW, agents are not allowed to underquote the cost of a property or else they’ll face fines up to $22,000. This means that if you see a property value on an online listing, it should be correct. However, you should still consider getting someone involved to double check the appraisal.

In Queensland, it is illegal for a vendor or agent to create price guides for buyers, so keep an eye on this. Vendors are also not required to announce when their property has hit a reserve price nor do they have to set the minimum price they want the house to be sold at.

In SA, the agents aren’t required to give a price guide estimate to the prospective buyers. However they will give you a list of recent sales information. You can also pre-register to the auction on the day of the auction themselves.

Auctions in Victoria and Western Australia

Unlike some other states and territories, you don’t have to pre-register to bid on a property on auction day. With no restrictions, absolutely anyone can rock up the auction and start bidding.

More Auction Tips:

• Registration: Only those who registered themselves as a buyer with the seller’s agent are eligible to make a bid. Only people with bidding numbers can participate in the auction. In SA you also need to present photo ID.
  
• Consider a pre-auction offers: Sometimes a vendor agrees to consider offers, before the auction. This negotiation process is the same as buying through a private sale.
  
• Check auctioneer’s license: Auctioneers are required to have a license, if they don’t be a bit wary of the auction.
  
• Make a pre-auction offer: In most states and territories you can make pre-auction offers, however, you don’t receive a cooling-off period if the offer is accepted before the scheduled auction.

If you are thinking of attending an auction soon, make sure to use our home loan comparison table to find what is the best deal for you.