House auction - advice sought
 

We have found a house that ticks many of the boxes of what we are looking for.

We were hoping to avoid auction, but going to the open house there were lots of people there and the agent did say that a couple of offers had been turned down as the vendors wanted to go to auction.

I have a feeling that the house will go at auction, thus relutantly have to take part in the auction if we are to buy this house. This make me a bit nervous of what we should do in the mean time (qs to ask, which documents to see etc) and how to approach the auction. biggest fear is of paying too much (ie we know what is our personal max, but this could be over what it is actually worth)

At the open house there was a report recently done on the house - the house is less than 20yrs old, would you rely on that report or would you get you own done?

Auction virgin seeking advice :unsure:

Re: House auction - advice sought
 

You should be OK with the Inspection report as long as it was done by a licensed building inspector as regardless of who actually pays for the report (the vendors in this case, I presume) it will be an independent assessment.

We've bought and sold at auction and it is nerve-wracking - there's no denying it. Make sure that you go to a couple of auctions beforehand so you know what to expect. Get a copy of the contract asap and let your solicitor give it the once-over. You can vary the contract before the auction but any changes you want have to be sorted out beforehand with the vendors.

Once bidding reaches the reserve, and if you're still in the running, try to slow it down by reducing the increments (bid in $500 lumps instead of say$5000 lumps) although that might not be possible if everyone else is still really keen. At least that way, if you win, you know you only paid $500 more than someone else was prepared to pay.

In lots of ways you have to play it by ear. Some auctions start slow and stay slow - others go really quick and you barely have time to think. You're really totally dependent on the other bidders ie. how much they want it and how much money they have to spend.

Edited to say - if you're really worried about bidding get a buyers agent to bid for you. They're the experts, they know all the tricks and are not shy. There's also no danger that they'll go over your limit.

Re: House auction - advice sought
 

Just want to confirm - you can't vary the contract after an auction? How likely is it that the vendors will change the contract when the property is going to auction? Will they change it just for you, or will it be comprehensively changed? I haven't been to see the solicitor yet, so have to find other ways to get the info!

To OP - you can never rely on a) what real estate agents say and b) how many people look keen at the open house! Some vendors will consider pre-auction offers because it will save them a lot of money if it's acceptable (and the real estate agent won't make so much!), it may be that no one's offered enough yet, or even no one has made an offer! And house viewers don't necessarily turn into bidders, so you may be lucky and turn out to be the only bidder on the day :)

Re: House auction - advice sought
 

Not going to auction won't save the vendor anything. It will however save the estate agent money and time.

Re: House auction - advice sought
 

Surely if they don't go to auction they save on the cost of the auctioneer etc?

Re: House auction - advice sought
 

No, the estate agent saves on the cost of the auctioneer. Whatever happens you pay one fee for advertising, auction, etc etc whether you go to auction or not. We have just started this process.

Re: House auction - advice sought
 

I've never heard of varying the contract after the auction (if the property was sold to you) as you have to sign it on the spot. I think the premise for bidding is that you accept the contract as it is.

If you want to vary the contract before the auction (and your change is acceptable to the vendors, of course) a special version is prepared just for you containing your changes and that's the one that you sign after the auction, if you win. Other bidders wouldn't necessarily sign the same version as you.

When we sold our house at auction, one prospective buyer couldn't pay 10% deposit and wanted to only pay 5%. We added a clause to their contract to say that 5% was an acceptable deposit up front but that if they didn't proceed to settlement they'd still be liable for the extra 5%. It turned out that they didn't win the auction anyway and the actual winner signed the original contract.

Re: House auction - advice sought
 

Every day I learn something new that amazes me - the real estate industry really have got this one sorted out for themselves :sneaky:

Re: House auction - advice sought
 

This is not true for all estate agents.

You have a contract with them and you decide what you are willing to pay for. If you want a sale and not a auction and no open houses or just appointments you ask for the price. Pay for what you want with many agents.

You need to look in your area for what sells and the fee of different agents. No bloody way would I pay for an auctioneer I don't need :)

Cheers

Re: House auction - advice sought
 

The agent sounds like he wants to take it to auction, so I wouldn't necessarily take his/her word about offers being declined. I think he's bullshitting.

How about you write a formal offer to the vendor, and give it to the agent. Put a time limit on the offer, say of 48 hours. The agent will have to give it to the vendor.

As for the house report, do your own. But look for several things: damp patches on ceiling, or evidence of previous leakage. Check out the roof tiles and make sure they're all in good order. The hot water tank may need replacing and they usually have the date installed on them... They last 10 years so if it needs replacing, factor this into the cost. Look at the house and if it's on piers underneath, make sure they're straight and haven't moved over time. Correcting slanted piers means lifting a house and that's damn expensive.
Other things to look for are the condition of the bathrooms/kitchen etc. Also look at the surrounding houses and how well they're being kept. Don't be afraid to talk to the neighbours and see what the area is like and what they know about the property.

Really, if these things are up to scratch, great, but don't be afraid to walk away. There is never only one house out there you can be happy in.

Re: House auction - advice sought
 

Arrghhhh!!! I'm getting even more confused now!! I did think you could do what you describe... as I have no house to sell, maybe I should stop worrying :)

Re: House auction - advice sought
 

Agree stop worrying :)

and when you do - do not take the advice on here as fact, as it may only pertain to the individual case of the person stating it. This includes all advice including mine :huh:

There are some great internet sites out there - you may need to read a few!

http://www.reiaustralia.com.au/consumer/choosing.asp

http://www.yourestate.com.au/

and the realestate agent sites themselves - those can be a bit biased as well but even some of them talk about there being a difference of auction and sale.

http://www.propertyportdouglas.com.a...e_methods.html

I would recommend getting solicitor advice (you need one anyway for the sale) and they should be more impartial than an estate agent.

Cheers

Re: House auction - advice sought
 

Forgot to add the guttering - that's another expensive one.

Re: House auction - advice sought
 

From experience get your own building & pest. Do not rely on the vendor's report as the contractual outs will exclude any come back by you.

Even a licenced inspector can bias the report in the vendors favour.

WW

Re: House auction - advice sought
 

There is a whole book by jenman (I think) advising on ethical house buying and selling
Why not a[proach the sellers direct with your offer