Buying at Auction

In the Bay of Plenty, and particularly within the fast-moving Papamoa market, auctions are often the preferred way to sell property. For a buyer, an auction is transparent, exciting, and—with the right preparation—one of the best ways to secure a home.

However, because an auction bid is unconditional, you must have all your “ducks in a row” before the gavel falls. Here is your local guide to winning on auction day.

1. The “Pre-Auction” Homework

At an auction, there is no “subject to finance” or “building report” clause. Once you win, you have bought the house. Therefore, you must complete your due diligence before the auction date:

• Review the Auction Pack: We provide a full pack for every auction listing. This includes the Title, the Sale and Purchase Agreement, and often a LIM report.
• Get Your Legal Check: Have your solicitor review the Title and the auction terms. If you need to change the settlement date or the deposit amount, this must be agreed upon in writing via a Variation of Agreement before the auction starts.
• Building & Meth Inspections: Arrange these early so you can bid with 100% confidence in the property’s condition.

2. Financing Your Bid

• Unconditional Pre-approval: Ensure your bank has seen the specific property’s details and has given you a firm “yes” up to a certain limit.
• The Deposit: If you are the successful bidder, you are usually required to pay a 10% deposit immediately. Ensure you have these funds accessible in an account ready for transfer.

3. Strategies for the Auction Room

Whether the auction is held on-site at a beautiful Papamoa beach house or in our professional Ray White auction rooms, these tips will help:

• Attend Other Auctions First: Come along to a few Ray White auctions as a spectator. Get a feel for the rhythm, the auctioneer’s style, and the atmosphere.
• Position Yourself Clearly: Stand where the auctioneer can see you. Make your bids clear and confident.
• Know Your Limit: Set a firm “walk-away” price and a “one last stretch” price. Stick to them.
• Open Strong: Some buyers prefer to start the bidding to signal their intent, while others wait until the end. There is no “perfect” strategy, but being decisive often discourages competitors.

4. What if the Property is “Passed In”?

If the bidding doesn’t reach the seller’s Reserve Price, the property is “passed in.”

• The Lead Bidder’s Advantage: Usually, the highest bidder is given the first right to negotiate with the seller privately. This is a powerful position to be in, as it often leads to a deal immediately following the auction.

5. Can I Buy Before the Auction?

If the advertising says “Unless Sold Prior,” the seller is open to pre-auction offers.

• If you make a pre-auction offer that the seller is happy with, the auction date is usually brought forward (often within 48 hours). All other interested parties are notified, and the auction starts at the price of your offer.