So we know that many of you will end up buying homes here in beautiful Brisbane, and we have our greta blog about house buying, but how many of you know what to do about the whole housing auction process which is the way so many houses are sold.
So we have the awesome Liz Browning back to offer some top tips for those house auctions here in Queensland 🙂
Thanks so much Liz
How do I know if a home going to Auction is in my price range?
Wouldn’t it be brilliant to have a crystal ball to know what every home will end up selling for? I know for sure I’d love one!
Be it a home selling by auction or by “private treaty” nobody knows what the end result will be. Here in Queensland with homes going to auction, real estate agents, by law, are not allowed to disclose the reserve or give any indication of where it is, but this varies from state to state. The best thing you can do is to make contact with the agent and tell them what price range you’re looking to buy in. They should then advise whether that particular home will be suitable or not.
Agents help the Seller to set a listing price by comparing the home to others similar that have sold in the past 6 months or so. In the case of an auction, the agent advises the Seller on all the market feedback which helps the Seller to set their reserve price. It is always important to make sure you do your homework, and all your due diligence prior to auction day, as buying at auction is an unconditional contract.
The great thing about an auction is that it is totally transparent. If there is competition, you will see who it is and be given the opportunity to purchase if you wish. If there is a property that you like which is going to auction, it is important that you communicate this with the real estate agent. If an offer is made prior to auction day and the Seller is willing to accept it, a good agent will ensure all interested Buyers are contacted and are also given an opportunity to make an offer prior. Communication with the real estate agent is paramount!!
How to bid at an auction
As an agency that runs a lot of auctions, we often get asked by buyers “what do I need to do to get ready for it?”
The aim of this blog is to help buyers with the auction process and to give you some tips on bidding at auction.
We often hear from people that they don’t like buying at auction due to the pressure of having to make a decision quickly. Perception is a funny thing because if you are prepared, this simply isn’t true.
The key advantage of buying at auction is this – at an auction is you can see your competition. Once the property is called on the market, you can see who your competition is and what they are willing to pay. This is a true indication of the market value of the home. You can rest easy knowing that you didn’t pay too much, you simply paid fair market value.
The secret of buying at auction is to be prepared, start getting ready as soon as you can. Here are some tips to help you get ready.
1. The first step is to make a decision on what you are prepared to pay. Set yourself a limit and stick to it however, here is the secret, don’t set that limit as a round number as that is what a lot of people do. If you believe it’s an $800,000 home, you may set your limit at $802,500. That extra bid may be what gets you the home.
2. Prior to the auction, check the property and the contract thoroughly. Ask the agent for a copy of the contract and ask your solicitor to read over it. Get a building and pest inspection done and use this to help you with what you are prepared to pay. Sometimes the seller has already had this done and the agent will be able to give you a copy of it. If issues come up, build that into your purchase price. Also if something unexpected comes up, let the agent know that way he can pass this information onto the seller, they can then build that into what price they are prepared to sell the home for.
3. Speak to a mortgage broker or your bank about a pre-approval for finance. Once you buy the home, it’s yours so you want to be able to ensure you can settle.
4. Speak to the agent about deposit and settlement. The standard agreement is 10% deposit and 30 day settlement however if that doesn’t suit, you can arrange a more suitable settlement and deposit. The agent simply needs to speak to the seller and get their approval. That said, sometimes the seller needs time to make this decision so give the agent as much time as you can to get the change in terms agreed to.
5. Attend other auctions to see how they work. If you can, watch the auctioneer that will be auctioning the home you have interest in, you may pick up some of their techniques that will give you the upper hand on other bidders on the day of your auction.
6. Don’t be afraid to ask for help. If the whole auction process scares you, ask for help from a friend or professional. You will be surprised how easy the whole thing is but it’s always nice to have someone there with you if you need it.
7. The last step is probably the most important – relax, don’t let the auction intimidate you. At the end of the day it is simply a negotiation, and remember the biggest advantage of the auction for you as the buyer is that it is public, you can see your competition rather than things being done behind closed doors.
In summary, if you are prepared, know what you are willing to pay and have done your research, bid with confidence and secure the home.
By Liz Browning from Place Real Estate
Many thanks Liz
The Joy Girls