Don’t be afraid of fall of ham­mer

Buy­ers and sell­ers should not be daunted by auc­tions – it can be the most trans­par­ent way to sell or buy prop­erty

Sold On Sunshine Coast - - Market Review - By MICHELLE HELE

WHILE the in­ex­pe­ri­enced may be hes­i­tant, buy­ing and selling at auc­tion can be the most trans­par­ent way of par­tic­i­pat­ing in the prop­erty mar­ket. Auc­tion­eer Haes­ley Cush of Ray White said it al­lowed buy­ers to see their com­pe­ti­tion and know what oth­ers were pre­pared to pay, and it also al­lowed sell­ers to get a real time idea of what buy­ers thought their home was worth.

Mr Cush said his best ad­vice to those think­ing of selling or buy­ing at auc­tion was to at­tend as many auc­tions as they could to see how it all worked.

If you are buy­ing at auc­tion

Reg­is­ter in the name which is go­ing on the con­tract. It seems ob­vi­ous right?

But some buy­ers have come un­stuck. “You must know the en­tity you are buy­ing the prop­erty in. Is it your name, your part­ner’s name, is it a trust fund? ‘’ Mr Cush said. “Take your driver’s li­cence or pass­port when reg­is­ter­ing and if you were keen to bid, it was a good idea to reg­is­ter be­fore the auc­tion day, so noth­ing was left to chance.

“One of the other most im­por­tant things to do on auc­tion day was to make sure you were ready to pay the de­posit if you were the suc­cess­ful bid­der.

“You need the de­posit at the auc­tion. “Un­less the owner al­lows for some­thing dif­fer­ent the stan­dard terms of an auc­tion call for a 10 per cent de­posit, on the day.

“Al­most every modern auc­tion ac­cepts a five per cent to 10 per cent de­posit, but this is at the seller’s dis­cre­tion and will be an­nounced to po­ten­tial buy­ers on the day.’’

As few peo­ple still had per­sonal cheque books, Mr Cush said it was im­por­tant to work out be­fore­hand how you would pay the de­posit. Some sell­ers may al­low funds to be trans­ferred within 48 hours, or they may set a dol­lar amount which they can sub­mit as a bank cheque, but this needs to be nut­ted out be­fore the bid­ding starts.

As do any other vari­a­tions in­clud­ing longer set­tle­ment pe­ri­ods.

It is too late once bid­ding gets un­der way. And if you can’t make it on auc­tion day some­one else can bid on your be­half as long as they have a writ­ten let­ter stat­ing that they can sign a con­tract on your be­half – that is a power of at­tor­ney or bid­ding au­thor­ity.

“I’ve found a few buy­ers of late seem to have a lim­ited un­der­stand­ing of auc­tions and sub­se­quently are turn­ing up yet plan­ning on not par­tic­i­pat­ing,” Mr Cush said.

“How­ever by not bid­ding and let­ting the prop­erty pass in this has only led to a far more com­pet­i­tive and un­com­fort­able sit­u­a­tion straight af­ter the auc­tion as they en­ter a closed door ne­go­ti­a­tion or what is com­monly re­ferred to as a Dutch auc­tion.

“Th­ese ne­go­ti­a­tions see all buy­ers given one chance to sub­mit their best of­fer with­out any idea of their com­peti­tors’ price or even the num­ber of other of­fers.

“It re­ally amazes me when peo­ple turn up to an auc­tion with a pre-ap­proval from the bank, have in­spected the prop­erty a num­ber of times and have a game to buy the prop­erty that falls into line with ‘I’m not bid­ding, I’m just gonna watch and see’.

“Mostly th­ese buy­ers are just ig­no­rant about auc­tions.

“They are ner­vous about the un­known and don’t want to pay too much.

“But usu­ally it only takes a minute to re­mind them of the rea­sons as to why they should par­tic­i­pate, all in line with what I’ve listed above and they usu­ally warm into the bid­ding.”

If you are selling at auc­tion

Mr Cush said one of the most im­por­tant things to take into ac­count when go­ing to auc­tion was to choose the right auc­tion agent.

“Auc­tions are a spe­cial­ist way of selling real es­tate. There is no price, the con­tracts are un­con­di­tional and work­ing with buy­ers to pre­pare them to bid takes ex­pert pre­ci­sion,’’ he said.

He said gen­er­ally for a seller the cam­paign was short and sharp, four weeks.

The cam­paign gave buy­ers a dead­line to make a de­ci­sion and could stop the selling process drag­ging on.

There may be of­fers made be­fore auc­tion and sell­ers needed to weigh up whether they wanted to ac­cept those nor not, but they could still ac­cept pre-auc­tion bids un­der auc­tion con­di­tions, that is no fi­nance or build­ing and pest clauses.

A cou­ple of other things to keep in mind

If you are the suc­cess­ful bid­der, you are the buyer. That means you need to pay the de­posit. You can­not add in a fi­nance clause or build­ing and pest in­spec­tion into the con­tract. Th­ese things need to be done be­fore auc­tion day.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.