Today, let’s us continue to discuss about the step by step guides for property buyers on the auction day.
Before you really want to get the auction house on your hand, make sure you have call to the auctioneer to check whether the property you are interested in is still available and hasn’t been withdrawn. You must also make sure your bank draft is with you before the auction day and before set out to the venue.
Step #1️⃣️: Arrive the venue 1 hour before start
On the big day, you should arrive at the venue at least 1 hour before the start of the auction. After arrival, don’t proceed to the registration yet, instead, wander around near the registration counters to see if there are any other bidders are bid for the property that you interested in. This is because you don’t want to be the first and only bidder in the auction hall, as once the hammer goes down, the auctioneer will announce you are the winner right away without giving you any chance to quit.
Besides, if there are no bidders for this property, it is a good opportunity that this property will be put up for next auction with the reserve price lowered by another 10%. You can then keep up with this property’s status and keep in touch with the auctioneer to get the date of the next auction.
Step #2️⃣️: Proceed with the registration
Once you finished your observation, you can then proceed to the registration counter and register your name, address, contact details and deposited your bank drafts. After completed the registration, they will issue a bidding number to you and allowed you to enter to the auction room.
Step # 3️⃣️️️️️️️: Choose to remain aloof or socialize with other bidders
After you have done the registration, you can choose to remain aloof or socialize with other bidders. Sometimes, there will have some people waiting there hoping to earn some pocket money from serious bidders, especially for high demand properties.
For example, bidder A telling bidder B, that A willing to offer B a thousand cash to leave the auction hall as A want to win this property. While, B also want to win this property very badly. B could be then add up the offer price to 3 thousand cash, and A accept it and leave the hall. See, do you know what it’s mean? Apparently, bidder A get involved into the auction hall is just finding the opportunities to earn “pocket money” from other serious bidders. And you can’t do anything whether you won or lose the bid, you’re losing RM 3k anyway.
This case are often happened on inexperienced bidders. So, you should attend some other auction fairs for only observe the situation in live to learn the tactics from other bidders.
Step #4️⃣️️️️️️️️: Enter the auction room
All bidders who have deposited their bank drafts will be allowed to enter the auction room. The auctioneer will start to stating the conditions of the sale, explain the auction procedures and set the price increment.
For properties less than RM 100k, the price increment will be start off by RM 500. For properties above RM 100k and less than RM 1m, it will be RM 1,000. In addition, the auctioneer will depend the number of people and minimum reserve price to set the price increment.
Once the bidding starts, stay calm and not to join in the initial stages as there will be a tendency to get carried away. This is because the auctioneers will try their best to encourage or lure on the early bidders to continue bidding, to make the property price as higher as possible.
If the final bid is out of your budget that you set earlier, stop bidding and don’t be disappointed, there are still have a hundred similar properties are waiting for you to bid them up.
If you can’t make an auction in person, you can then appoint a property agent to bid on your behalf. You will require to give a Authorization Letter for this person to represent you along with a photocopy of your identity card.
Step #5️⃣a️️️️️️️️: If you win the bid
If you win the auction,you are required to sign the Memorandum or Contract which will becomes the S&P Agreement. Hooray, you are now the new owner of the property.
If the reserve price was RM 300k and the final winning bid was RM 350k, you have to immediately pay a 10% of RM 350k. But, if your bank draft is only RM 30k, you have to immediately pay the additional RM 5k by cash or bank draft and sometimes even credit cards for auction fairs held in hotels.
Therefore, it is advisable to prepare extra cash or credit cards for in case you won the bid and initial 10% bank draft is insufficient.
Step #5️⃣b: If you lose the bid
While, if you lose the bid, you can keep in touch with the winning bidder to see if he/she can raise the balance amount or complete the transaction by due date, the 10% deposit that he/she paid earlier will be forfeited by the bank and he/she is not allowed to do a direct transfer. Therefore, the property will be put up for next auction. So, you can bid this property again.
Alternatively, you can approach to the winning bidder, congrats him/ her sincerely, exchange business card, and let he/she know that you are still interested in this property. If he/she plan to sell this property in future, guess who is the first person he is going to call?
The golden rules of bidding at an auction
➼️ Do your own research on the property that you’re interested in before the auction day
➼️️ Get your finances before the auction day
➼️️️ Arrive the venue at least 1 hour before the auction start and make sure you bring your bank draft and identity card
➼️️️️ Don’t get carried away with the excitement – always stick on your budget
➼️️️️️ Don’t get distracted by other bidders
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