Buying at auction avoids the traditional offer/counter offer negotiation process. An auction is an exciting, competitive environment where everything is out in the open. You can see your competitors and keep track of each and every bid. No deals behind closed doors!

Here’s my advice!

Before the Auction:

Once you have identified a property that you are interested in, you’ll know the date by which you need finance. You can sell you existing property, organise a building inspection, check the LIM, and ask your lawyer to check the title, and auction documents.

Ask to see the REINZ Code of Practice for auctions, and ask the agent whether they and the owner will comply with those rules. There should be a signed copy on display.

Ask your sales consultant to give you a better idea of the local market. The consultant should be able to provide you with an overview of the local market, or ask Zoodle! Zoodle has sales statistics and information on every community in New Zealand. Or you should consider obtaining an independent valuation from a Registered Property Valuer as a guide.

If you have never attended an auction before, you should definitely attend one before the auction of the property you are interested in. This will help you get a feel of the auction process and it’s various features.

Sometimes though, a property sale never makes it to auction day. Someone makes the seller an offer they can’t refuse and the auction is “brought forward” or “sold prior”. At Harcourts there is a system to ensure fairness to all.

If you are interested in a property let the sales consultant know. Then, if another purchaser submits an offer that is acceptable to the seller, you will be contacted and given the opportunity to present your own offer. Sometimes an auction will be conducted several days or weeks before the advertised date, and all interested parties are given the opportunity to purchase the property.

Inspect the property as many times as necessary. If you have any doubts, get a builder, plumber, electrician or any specialist to advise you.

Check the auction documents. Make sure you are familiar with all the details and conditions of sale, (the deposit, possession date, balance of payment, list of chattels, etc). You don’t want any unpleasant surprises on auction day.

Arranging finance before auction day is essential. Have a chat with a mortgage broker or with your bank. Don’t forget, an auction sale is unconditional, so it’s vital to have you finance confirmed before you bid.

On Auction Day:

• It’s your last opportunity to ask questions before the bidding begins.
• The auctioneer will begin by reading the terms and conditions of sale and then give a sales pitch about the property.
• Most auctions are held “subject to a reserve price”. This is the price below which a property may not be sold.
• Making a bid involves making any gesture that attract the attention of the auctioneer. If the auctioneer is unsure whether you made a bid he/she will ask you to confirm it. Be aware that any bid you make over the reserve price could be the one that buys the property.
• “Passed In” is the term used when a property fails to reach the reserve price. The highest bidder usually has the first opportunity to negotiate with the seller or their agent.
• If you are the successful bidder on the day you will be asked to sign the contract and pay the deposit. the deposit is usually 10% of the purchase price.

If you have any questions about any auction, whether a Harcourts auction or another company’s auction and need assistance of any kind please do not hesitate to contact Tony White on 0800 61 8888.

You might need a valuation for a property when you’re  thinking of buying or selling, but there are other reasons to get your property valued, for example, you may wish to borrow money or insure your property and for this you’ll need a Current Market Valuation.  And your local council levies their rates based on the valuation of your property called a Rating Valuation (RV), up until a few years ago it was called the GV or Government Valuation. Occasionally there are disputes over property, for example matrimonial disputes, commercial disputes and other issues that require a valuation.

Let’s look at the GV or your rating valuation:

Council Rating Value

The RV (rating value) used to be called the GV (government valuation) and sometimes the QV (quotable value) and is legally required under the Rating Valuation Act 1998. It’s for calculating the city council rates and is done every three years. It is not a current market valuation, and often has little resemblance to the selling price of a property.

The Current Rating Valuation is calculated by Quotable Value Ltd, using computer models of both land and improvements. Usually, they don’t visit the property, and very rarely inspect the interior. The condition, maintenance and improvements to a home are not known unless reported through council records, and a building permit issued for improvements. The valuation has three parts:

Land Value: This is the probable price that would have been paid for the land at the date of valuation, and includes any development work that has been carried out. It’s calculated on a square metre basis, ie a larger section has a higher value than a smaller section, regardless of the fact that it may just be a single house site.

Capital Value: Assessment of probable price that would have been paid if it had been sold at the date of last valuation.

Value of Improvements: This is the difference between land value and capital value. It does not represent replacement cost, or reflect that a house is poorly or well maintained, or may have unresolved issues such as “leaky home” or lack of a Code Compliance Certificate.

Current Market Valuation

A registered valuer carries out a full inspection of your property, noting the condition of the property and the state of the maintenance, including the size of the home and any related buildings. Local knowledge of the area, including community amenities, is noted. An assessment of recent sales of similar properties is made and compared with the property to arrive at a valuation.

Most banks and lenders will require a current market valuation from a registered valuer if you are borrowing more than 80% of the value of your property. Sometimes that ratio can vary according to market changes and your personal situation.

What’s in a Current Market Valuation?

It should have:

A copy of the title

A description of the property

The current market value

A mortgage recommendation

A description of the locality and associated amenities

A report on recent sales in the area, including addresses, prices and descriptions

Valuers

Your valuer must be:

A member of the New Zealand Institute of Valuers and/or the Property Institute of New Zealand. I would recommend a local valuer, rather than a valuer from another part of Auckland or New Zealand. Valuers offer other services and you should ask if you require a Commercial Valuation or an Investment Valuation, or require mediation in the case of a dispute over the value of a property.

Here’s a couple to try:

Liam Lyons has been valuing property on the North Shore for as long as I can remember, is well respected and very helpful; call his office on 09 489 5329, or visit the Lyons and Co website. They are right in the heart of Takapuna in Anzac Street.

Prendos offers a wide range of services including  property valuation, building and quantity surveying, remedial design and administration and dispute resolution.

Prendos is a leader in property advice and design remediation of defective buildings.  They provide the full range of property evaluation, building performance and condition and failure assessment.  Dispute resolution services include arbitration, adjudication, mediation and expert evidence from leaky buildings to property condition and lease disputes. You can contact Tony Carlyle on (09) 486 1973  (ext 718) or mobile: 021 482 320 or go to the Prendos website. Their office is in Barry’s Point Road.

Valuation of Rental Properties

You should be able to get a written assessment of potential rental returns from any property manager. They will look at what similar properties in the area are being rented for and take into account market trends. You’ll find Lizzie Simanke here at Harcourts Milford really helpful on 021 366 339 or Dennis Hopkins at North Shore Rentals Ltd. Again Dennis has been around longer than I have and that’s saying something! His contact number is 09 489 4651 or 021 929 171.