Ep 5. All About Online Auctions
In light of the recent lockdown in Sydney, this is a special episode focused on online auctions. Michelle explores the nuances of online auctions and how to be prepared to reach a desirable outcome.
Here’s what you’ll learn from today’s episode:
Where online auctions are hosted.
Registering for an online auction.
What happens during an online auction.
How to be successful in an online auction.
Speakers in today’s episode:
Michelle May - Michelle May Buyers Agents
FOLLOW US:
ENJOY THE SHOW?
Don’t miss an episode, subscribe via iTunes. If you like it, please leave a review!
Or, find us on the podcast app of your choice, such as Spotify.
This podcast has been recorded and edited by Cobalt Soundscaping
Please note that any views or opinions presented in this podcast are solely those of the speakers, and do not necessarily represent those of any business. These views and opinions are general in nature, and do not take account of your personal objectives, financial situation and needs. Please consider whether it applies in your circumstances and seek professional advice wherever appropriate.
Listen to the Episode Now
VIEW FULL TRANSCRIPT
Hi and welcome to Buy Your Side, the property buying podcast, aimed to help you make better property buying decisions. My name is Michelle, I am the principal of Michelle May Buyers Agents, and today, since we are in lockdown again here in Sydney and for some parts across the country, I wanted to talk to you about online auctions. How do you register? What are the things to look out for? And, how to be successful?
So the first thing to make note of is that obviously we have gone through a few lockdowns now, unfortunately we're in the middle of one right now, and the online platforms that are now currently available, many of them were rushed through the beginning of last year when we first came to experience Covid. And so they have been fine tuned somewhat and agents have more experience with them now. So that's a good thing if you are looking to buy a property online at the moment. Agents are a lot better versed than they were before, so they will be able to guide you much better. But there's quite a few different platforms out there. There's 'Sold Online', 'Open.com.au', 'Auction Now', and 'Zoom'. I just wanted to run you through the main differences and how to get ready and make sure that you are prepared so that you take most of the stress away from bidding at auction because I do realise that it's probably one of the most stressful part of the whole property buying process.
So I've recently, in the last week, bought two properties, one via Zoom and one via Auction Now and they were quite different experiences, and I thought maybe you could benefit from just hearing about what I had to go through with my clients.
So first of all, you need to ensure that you have access to reliable internet. I mean, I know that sounds like a given, but really across Australia, the Internet can be quite patchy. So I've actually chosen to use my hotspot on my phone every time because I just found it to be more reliable when the auction actually begins. Before you can actually bid at auction on the day you will have to preregister, and say the auction is on a Saturday, you typically have a cutoff date: the night before. Which is a good thing to register well in advance just in case there is an issue with registering, because there's a number of hoops you will have to jump through, such as uploading a copy of your ID for example, or if you're working with someone else bidding on your behalf, you will have to upload an 'authority', a document saying that you are allowing this person to do such a thing. So as I said, even though they've worked out most of the teething problems from last year, there are still issues along the way. I did find that to be the case when I was getting ready for my online auctions recently. So do make sure that you allow a couple of days just to make sure that, you know, the auctioneer has got all your information and just double check that with the agent as well.
Once you have registered you will get a bidding number of some form. Whether that is just a number that will pop up on the screen on the day when you are bidding, or whether they will send you a copy to your phone, and then that image you have to show when you're bidding, for example with a Zoom auction. So those are a couple of things to be aware of prior to auction, as well as making sure that you can actually pay the deposit on the day. So there's a number of ways, again, how agents will want your money, your 5% or 10% deposit. It could be a direct deposit into their trust accounts, in which case you have to get in touch with your bank a number of days before to make sure that your daily transfer limit has been lifted because most bank accounts will have, say, $5,000 or $20,000, but usually not the amount for a whole deposit for it to purchase a property. So get in touch with them. Some banks make you go into the branch as well, I know HSBC, for example, makes you go in. Other banks, you can do it online. Other banks you have to call people. So just make sure that you allow plenty of time for that to be done ahead of the auction because, you know, you want to make sure you can transfer the amount, and obviously the money or copy of the receipt of the money needs to be there in order for the agent to be able to exchange contracts. So that's the direct deposit part of things.
The other option is to pay with Macquarie Auction Deft Pay, which was set up by Macquarie Bank a number of years ago now. And they actually have the same authority as the ATO, which is a scary thought, but also very efficient in many ways, because all the agent will need, is your BSB and your account number, and they can then withdraw the money through that system directly, which is great because you don't have to worry about having a daily transfer limit or anything like that. But best to check with your agent prior to the auction as to how you will be expected to pay that deposit, typically the signing of the contract is now done automatically and online as well, whether that's through DocuSign or another online automated system, because obviously we want to make sure that we're not breaching any lockdown protocols.
So you're ready to bid. With these different platforms you need to be aware, with some you will just be a number on the screen and all you will see is actually the auctioneer. And on the portal, the only thing you'll have is a pop up window where you can put in the numbers. It's almost like a calculator on your screen. You put in the number that you're happy with, you press enter, the system will then say, "are you sure you want to do this bidder #3?". You say yes, and then that number, your bid, will pop up on the video where you're seeing the auctioneer saying "#3 has the highest bid at this number". There is somebody with the auctioneer showing the auctioneer what the highest bid is and he or she will then call it out. So you don't actually physically get to see anybody. But with other systems such as Zoom, which everybody knows is from the meeting platform, you will actually see everybody, and so they will also see you. You actually will be asked to show your face. You have to put your video on. You cannot be on mute because obviously you can't make your bid then. And so much like a normal in-person auction, be aware that the other bidders can see you, and if you are making it up as you go along and you're talking to your partner in the room or family members, they will be able to see and hear that. So, as always, I recommend that with any auction, is to make sure that you have your maximum bid already planned out before you go in because you don't want to make it up. And in fact, the last auction that I did just on Saturday, I won the auction that way because I could see exactly what this lady was doing and I just took advantage of that and managed to purchase the property for my client. So that's something to be aware of.
The other things are just practical things, because this is a nerve wracking situation for everybody, even for myself (I think any person who says they're not nervous for an auction, whether they're professional or not, will be hard pressed to find somebody whose heart rate doesn't increase somewhat). Just find yourself in a quiet place away from kids, animals, potentially even your partner, because you need to focus. You know, this is quite a nerve wracking situation. I would say, put the phone number of the selling agent in your phone. Save it in your phone so that if you have any technical issues, they are only a text or a phone call away. It did happen to me on a number of occasions where the screen would freeze or, you know, we couldn't hear the auctioneer properly. So we could just send a message to the agent saying, "Hey, could you just hold the auction?" Be aware of that because there'll be more than just you possibly bidding. There may be other people who will be having technical issues. So they will just place the auction on hold while they sort this out for other people in the background. So be aware of that. Stay in a quiet place, have a pen and paper handy so you can keep track of the bids, they do typically pop up on the screen. But just having a paper and pen handy and just writing it down will help you form a clearer idea of what your next bid will be as well. And just make sure that you don't exceed your maximum bid no matter what kind of auction it is. You don't want to be overstretching yourself in the heat of the moment.
Now, I think that should help you along with the next time you have to place a bid online. If you do have any questions around auction bidding, whether it's online or in person or anything else to do with property buying, do drop me a line. I'd love to hear from you. If you are in a particular situation with your property buying and you're having trouble, get in touch. Maybe I can help you along the way. The email is hello@buyyourside.com.au. I look forward to receiving your emails and I can't wait to talk to you next time. Thank you so much for listening.