Auctions, you just can't get away from them these days. Take one look at TradeMe Property or Realestate.co.nz or any real estate agency website and you'll see that a lot of the listings are auctions. I tried to google what percentage of houses are sold by auction these days in NZ, and while I'm sure the stat is out there somewhere, google didn't see fit to share it with me, but I'm sure it is high, particularly in hot markets like Auckland, Hamilton and Tauranga etc.

I've always hated auctions as a buyer. Back in the good old days (aka a couple of years ago), when my husband and I were house hunting we just refused to consider houses that were going to auction, that's how put off we were by the whole thing. We hated the fact that you had to spend so much time and money doing all the due diligence only to have your hopes dashed in the auction room. Not to mention, you needed to be cashed up in order to pay the on-the-day deposit requirement.

I'm always horrified when I hear of would-be home owners not doing their due diligence (in terms of builders reports etc) before buying a home but in this current market where everything is going to auction, I can kind of see why they might feel the need to do this (or more accurately, not do this). Depending on how many auctions one attended you could end up eating into a good chunk of your deposit just doing all the due diligence required for each home. (not that I'm advocating not doing due diligence, I personally don't think that's a wise move, but I can understand why some people chose that path).

Not to mention the nerves when you're bidding and the number of hopes and dreams that are left shattered and broken on the auction room floor when you missed out on the house of your dreams or missed out yet again, for the upteenth time on buying a house, any house.

I've recently been on the other side of the fence and done something we never thought we would, and sold at auction. I've discovered that selling at auction is just as awful (in fact, possibly even worse) than buying at auction. It wasn't something we would ordinarily have entertained the idea of but for the fact that we literally did not know what our house was worth in this market. Which is crazy really. Six months ago I could have told you with relative confidence and certainty what our house was worth (and what number to put next to a real estate listing), now, not a chance.

As a seller at auction (and being of a somewhat nervous disposition) it was the most nerve racking experience. I genuinely can't recall being more nervous and terrified than the day of the auction (it ranks right up there with having to do school speeches). My hands were clammy, my stomach was in my throat. During the bidding I literally had to close my eyes and practice my deep breathing just to keep calm. What if no one bids? What if reserve doesn't get reached? What if we've set our reserve incorrectly? You're often hearing about all these houses that do amazingly well at auction but for every one of those there are the ones that don't do well, that don't get bids, that get passed in - what if we are one of these? And while the agent and auctioneers are always reiterating that you don't have to sell, that you're in control, it does end up feeling much harder to back out or change your mind once you've committed to the auction process. The feeling of uncertainty around auctions, regardless of whether you're buying or selling is something I don't think I'll ever get used to.

So in summary, I don't think it matters what side of the fence you're on, auctions bite! Unfortunately, I can't see them going anywhere soon so if you are faced with one, the best advise I can give you is just to close your eyes and take long depth breaths.

The information contained in this article is of a general nature and should not be taken as advice. It reflects the opinions of the writer only and does not necessarily reflect the opinions of New Zealand Home Loans.