Frequently Asked Questions
A house auction is a public sale of a real estate property through competitive bidding. Auction properties can include residential homes, commercial buildings, land, and investment properties.
Here are some things to know about house auctions:
How they work
In an auction, bidders compete to purchase a property by offering increasing prices. Auction houses typically establish bidding increments, which are predetermined amounts by which bids must increase.
Why properties are auctioned
Properties are often auctioned off when the previous owner is unable to meet their home loan payments. The bank then takes possession of the property and auctions it off to a new buyer.
Benefits
Buying a house at auction can be a low-cost way to become a homeowner. You may be able to purchase a property at a much lower price than a similar property on the market.
Risks
However, there are also risks associated with buying a house at auction, including hidden fees and the possibility of not being able to view the property before bidding.
Preparation
It’s important to do your research before attending an auction. You can view the auction catalog of properties, arrange viewings, and seek legal advice.
After the auction
If you win the auction, you’ll need to sign the Proclamation of Sale (POS) and settle the balance of the purchase price within the predetermined timeframe. Failing to meet the deadline may result in forfeiture of your deposit.