Purchasing at Auction – A Step By Step Guide

It often feels like you’re stumbling in the dark when you’re buying your first home.  So we’ve compiled a list of steps you are likely to go through in your house-buying adventure when purchasing at Auction.

When You’re Ready To Start Looking:

• You’ll have a first meeting with your Mortgage Adviser.  Fill in forms and give them all the documents they need
• Mortgage is submitted to the bank
• A pre-approval is issued and presented to you.  This should be 5-7 days after submission.

Start Shopping:

• Tick off all conditions on the pre-approval.  The last remaining condition will be the bank seeing a signed Sale and Purchase.  This can’t happen until after the Auction but you need the bank to confirm they are happy with the Sale and Purchase as it is before the Auction.
• Win that Auction!

Some Auction Terminology

• Hammer Price: The last bidder price, acknowledged by the auctioneer before dropping the hammer (or gavel)
• Minimum Bid: The smallest amount that can be bid by a buyer, usually established through consultation with the seller
• Maximum Bid: The maximum bid set by a buyer who is bidding remotely (or by proxy)
• On-site Auction: An auction held at the property being sold
• Reserve Price: A price set by the seller that a buyer must reach before the seller is obligated to sell
• Sniper: A bidder that enters a last minute bid as the auction is due to be closed

If You Win The Auction

• Send the signed Sale and Purchase to your Mortgage Adviser immediately.  Once you have done this, your Adviser will begin to negotiate interest rates for you.
• Meet your Mortgage Adviser and discuss the best structure for your mortgage.  Documents will be sent to your Solicitor by the bank within a couple of days.

The week before Settlement:

• The bank will call you and arrange for you to come in and open all the bank accounts
• Your Solicitor will call you and arrange for you to come in and sign the documents.

The day before Settlement:

• You'll inspect the house and confirm it is acceptable

Settlement Day:

• Your Solicitor will let you know when you the money has been transferred.  You can collect the keys as soon as this has happened.

Congratulations!  You've bought yourself a house!!