With Queensland’s property market holding steady, many vendors are opting to sell their homes at auction rather than risk what can be a drawn-out process of ongoing open homes and private bidding wars.

Auctions provide potential buyers with a quick process to gauge the market and seal the deal on their dream property within minutes, but for some buyers this format is too much to bear with the tense atmosphere and high stakes strategising.

How can you keep your cool and get the edge while bidding at auction in Queensland? Here are our tips.

1. Know the rules

Auctions follow different rules to the private market, and it is essential that prospective buyers understand what they are getting themselves into when they bid. The most important difference to be aware of is that there is no cooling-off period on properties purchased at auction. Therefore, bidders must be prepared to buy the property they bid on and be satisfied that they have carried out the necessary due diligence.

2. Review the Contract of Sale

The terms of the contract should be agreed to prior to bidding as there will not be an opportunity to amend the terms after you agree to buy the property. Seek a copy of the contract as soon as possible before the auction and have it reviewed by your conveyancer or property lawyer. If you have any concerns or there are terms you would like amended, they can negotiate these for you. If you leave the contract review too close to the auction or do not have the contract reviewed at all, you risk running into problems after you have agreed to the terms, which may not be easily fixed.

3. Do your research

Auctions tend to bring out a competitive streak in people and while this can be a useful tactic for a seasoned bidder, a first-time buyer may not be able to suppress their desire to win and end up overpaying for the property.

To avoid feeling like you paid too much, carry out a thorough inspection of the property, including having any building and pest inspections completed before the auction.

Researching the area and comparable property prices in the lead-up to the auction can also help bidders to ascertain exactly how much they want to pay for the property so that they only exceed their cap if absolutely necessary. Walking into an auction blindly and being led by other bidders is not a wise move and less experienced bidders can sometimes be overruled by their emotions on the day.

4. Have your ducks in a row

It is risky to bid on a property if you are not 100% sure your finance is approved. If you are the highest bidder you are agreeing to buy the property whether or not the bank decides to lend you the funds. If your loan is not approved you cannot back out of the purchase, and this can cause complex and costly problems. You should be in a position to pay your deposit at the end of the auction, so be armed with a cheque or speak to your bank prior to the event to increase your transfer limit to allow the deposit to be paid.

5. Remember to register

Only registered bidders are allowed to bid. Those who are registered will be given a number which can be seen by the auctioneer and their team. Once registered, you will have the opportunity to ask the auctioneer if any changes have been made to the contract. The auctioneer must disclose certain conditions of the sale such as the expected deposit amount and if the contract has been amended.

6. Listen out for the vendor bid

Auctioneers in Queensland are allowed to bid on behalf of the seller (or their representative) if the reserve price has not been reached. A vendor bid must be announced by the auctioneer.

The purpose of a vendor bid is to inform the other bidders that there is a reserve on the property and that it is yet to be met. The reserve is the minimum price the vendor will sell the property for. Not every auction has a reserve and those that do will not have the price disclosed.

Once the reserve has been met, vendor bids are no longer allowed. The auctioneer does not have to announce that the reserve has been met (if it is) however if it is announced it must be said in truth as the property is now on the market and a sale will be made.

If nobody bids up to the reserve price the vendor can either take a price lower than the reserve or pass in the property. If the latter occurs, the property can be sold by private treaty and bidders can negotiate a sale price directly with the owner.

Should a sale be made within the two days following the auction, the buyer will not be entitled to a cooling-off period. If the sale takes place more than two days after the auction, there can be a cooling-off period.

7. Don’t be afraid to make a pre-auction offer

If an auction seems too stressful for you, you may make an offer on the property before the date of the auction. It is important to remember you may not be the only party making a pre-auction offer, and you can strengthen your deal by having your finance ready, being in a position to pay the deposit immediately or agreeing to waive the cooling-off period. You never know, it may be the price the vendor was hoping for at auction!