How does buying at auction work in Levin?

Is an auction different from buying by negotiation?

Yes, in one important way: an auction sale is unconditional. If you are the successful bidder, you cannot make the purchase subject to finance, a building report or anything else. That means the checking has to be done before the day, not after it.

What should I do before an auction?

The Real Estate Authority’s consumer guidance suggests you research the property first, including its value, title, council information and an inspection report. Tell the salesperson you are interested and ask for the auction terms and the sale and purchase agreement, so you and your lawyer can read them before you bid. Order the property’s LIM as well; our guide to LIMs and natural hazards in Levin explains what to look for.

Confirm your finances before you attend, because the deposit is usually paid on the day. If you want any change or condition in the agreement, it has to be agreed before the auction through a variation of agreement, and the seller decides whether to accept it.

What is a pre-auction offer?

A pre-auction offer is made before the auction date. If the seller accepts it, the auction may be brought forward or cancelled. Sellers sometimes signal that they are open to this with the words “unless sold prior” in their marketing.

What is the reserve, and will I be told it?

The reserve is the seller’s minimum acceptable price, set before the auction. The auctioneer does not reveal it, and bidding can start below it. Vendor bids are allowed only before the reserve is reached, and the auctioneer must identify them as vendor bids.

How does the bidding work?

Bids are open and each must be higher than the one before. The auctioneer sets the minimum increment. You can bid in the room, by phone, online, or through a nominated person with your written permission. If the reserve is not reached, the seller may lower it, the auctioneer may take the highest bidder aside to negotiate, or the property may be passed in.

What happens when the hammer falls?

If the reserve is met, the highest bidder wins and signs the sale and purchase agreement and pays the deposit as soon as the auction ends, even if bidding by phone or online. The balance is paid on the settlement date in the agreement, usually through your lawyer or conveyancer, and the keys are handed over that day.

To see what is coming up, browse our current auction listings, or read our buying guide for the wider process.

Source: Settled.govt.nz, Buying by auction (Real Estate Authority).