 |
Thinking of Buying? |
Buying A Home At Auction
Is the home you like being sold at auction? Here
are answers to some commonly asked questions about buying a property at auction:
Q. What is a Real Estate Auction?
A. Auction is a form of marketing a
property through intensive advertising mediums designed to capture the maximum
attention of buyers within a set time frame. The process is a means of
purchasing Real Estate through public negotiations to determine the true market
value of the property.
Q. What's the Reserve Price?
A. The reserve price is usually set
on the day of the Auction by the Vendor. The Real Estate Salesperson is unaware
of the reserve. The only person who will know is the Auctioneer. The reserve is
generally established by the intending Purchasers feedback.
Q. How do we bid at the Auction?
A. Simply attract the attention of
the Auctioneer by:
1. Putting up your hand.
2. By calling out.
3. Nodding your head when you catch
the Auctioneer's eye.
The Auctioneer usually nominates the
amount of the bid he is looking for. If you are the successful bidder, you will
be asked to pay the deposit and sign the contract.
Q. Can I buy before the Auction?
A. Yes, in most cases you can. You
simply submit your offer to the agent on a REIQ contract of sale and if the
price and conditions are agreed to, the contract is then completed and the
property is sold before Auction. In fact, 50% or more Auctions are sold this
way.
Q. I can't buy at Auction because
I have to get finance?
A. That's OK. You can organise,
through your bank or building society, approval to bid up to a price that you
are prepared to pay. This offer would be subject to the Bank's valuation. This
is simple to organise and only takes a couple of days.
Q. I want to buy it, but I have a
house to sell?
A. There are two answers. If you are
in a sound financial position you may organise a bridging loan. The other way is
to buy on a longer settlement date, giving you time to sell and to settle your
house.
Q. What price do I have to pay to
buy the property?
A. This is the price YOU are
prepared to pay. Other people will perceive different amounts. Generally, your
price will be established by what property has sold for around the area and also
the particular features that the home offers you.
Q. What if the house doesn't
sell?
A. If the reserve price is not
reached, it is passed in to the highest bidder. The highest bidder then has the
first right to purchase the property immediately after the Auction at the
reserve price, otherwise the property will be offered for sale to all other
interested parties.
Q. What contract do we sign and
what are the standard conditions?
A. The contract is the standard REIQ
contract. This contract is on display at the Auction. The usual conditions for
purchase at Auction are:
1. 10% of the purchase price paid as
deposit: either by cash, bank cheque or personal cheque.
2. Settlement date is 30 days from
the signing of the contract.
Pre-Purchase Checklist
- Contract for Sale - Standard
REIQ forms are available. Read the form to understand the requirements of
contract.
- Solicitor - engaged for legal
advice and processing of the sale.
- Inspection Reports - Provision
is made in the REIQ contract for building and pest inspections.
- Finance - if borrowing is
required, it should be noted on the contract.
As your real estate
consultant, I can identify suitable properties that are on the market right now.
