AUCTIONS

I have noticed that there are alot of Auction sales at present, they scare me a little.  I don’t know much about them so can you take a little of the mystique away for me?

There does seem to be a bit of a push from some of the marketing groups towards Auction at present so, I do agree they are more prevalent in the market at present.

It shouldn’t be all smoke and mirrors with an auction because, in real terms it is the most simple form of selling there is.  This process has been around for centuries and was the most common form of selling goods and property.

In simplistic terms a date for Auction is pre-determined, advertised for
inspection, the buyer views and considers the homes suitability for their families needs and
decide whether to buy it or not.  Should the home suit their needs they determine the properties value to them and set a figure in mind that they are prepared to pay.

The seller undertakes the same process but in reverse and sets a minimum price that they would be prepared to accept. This  is called a reserve. Should the
purchaser meet reserve or the seller agree to alter the reserve price to meet the purchasers ability to pay, then the property will be sold. In simple terms it is an open forum for negotiation as things must be done in a transparent manner.

So what is different to a normal method of selling real estate. As a purchaser of a property under normal circumstances you have the ability to purchase the property
conditionally. These conditions are inserted to protect your rights as a consumer in the market using conditions such as obtaining suitable finance, maybe a building
inspection, a LIM report ( Land Information Memorandum) and the like. With public
auction you must sort these issues out before you either make an offer or compete at
auction, in other words your offer must be unconditional. In this instance we would
recommend that you seek independent legal advice before you proceed with the offer process.

Mortgagee Auction is different again whereby the sale has a predetermined set of conditions which set greater limitations on you as a purchaser. You need to be more diligent in your pre purchase process and understand that you are buying the real
estate and not much more. For example the chattels that would normally form part of a sale are not included in a Mortgagee sale property, and there can be issues with the taking of  possession. These and other issues can be explained to you by the real estate agent and can be confirmed by your solicitor or legal representative.

With any purchase the real-estate agent must offer you the opportunity to seek independent legal advice before signing a sale and purchase agreement of any sort and it would be our advice that you avail yourself of that opportunity.

Good luck with your housing and may the force be with you in the auction arena.