Auctions and bidding
An auction bid is an unconditional offer. If the hammer falls on you, you own the house and the deposit is due that day. That means every check, the title, the LIM, the building report, the finance approval and the KiwiSaver timing, has to be done before the day. Our three-week auction plan is built around exactly that.
What it is
Auction is the default sale method for much of Auckland. The auction agreement is unconditional and usually requires a 10% deposit on the day. Properties that pass in are then negotiated with the highest bidder, often still on unconditional terms. Pre-auction offers are possible but bring the auction forward rather than replacing it.
Why it matters
There is no finance condition and no building report condition on auction day. If you bid without the bank's written approval for that property, or without your KiwiSaver already in a trust account, you are gambling. On the other hand, a buyer who has done the work and knows their ceiling is in a strong position, because most of the room has not.
How we handle it
We run a pre-auction review of the title, LIM and auction agreement, usually within two working days. We check the deposit mechanics, including whether a smaller deposit can be negotiated with the vendor's lawyer before the day. We give you a written ceiling and a plan for what happens if the property passes in. We do not recommend pre-auction offers.
Common traps
- Bidding with a pre-approval that has not been confirmed for the specific property.
- Needing KiwiSaver for the deposit when the provider has not paid out yet.
- Being drawn past your ceiling by the auctioneer. Decide the number in writing beforehand.
- Walking away after passing in without realising you may still have the first right to negotiate.
Not sure how this applies to you?
A free 15-minute call with a property lawyer who only works with first home buyers.