Newcastle Living Magazine
Common Misconceptions About Auctioning A Property
Over the course of my career, I’ve been asked many questions about auctions. While they’re more common in today’s real estate landscape, there are still many misconceptions about the process.
Here, I’ll share some insights and answers to frequently asked auction questions.
I’ve been told auctions are really expensive compared to normal sales, is this true?
Many vendors have the preconception that auctions are quite an expensive exercise. In reality, the only additional expense you have from choosing auction as opposed to private treaty is the auctioneer cost. Whether in rooms or onsite, the auctioneer is the only real extra cost – and this will vary from $500 to $1000 depending on who and where.
Can I sell before auction?
Absolutely. Selling before auction is quite frequent and this is something you can discuss with your agent when listing your home for auction. Your agent will guide you and make recommendations if they feel accepting an offer prior to auction is beneficial to you based on your situation.
What happens if I don’t sell on the day?
If your property doesn’t sell on auction day under the hammer, you have until midnight the day of the auction to continue negotiations and exchange under auction conditions. Post this, you can enter into negotiations with any interested parties and/or put a price on the property you’re happy with and is based on market feedback and sell via private treatypost auction.
How do I set a reserve?
Setting the reserve is a simple process, and at Ray White Newcastle Lake Macquarie we want you to feel completely secure that the auctioneer and agent are working together in the background to have a handle on all interested parties, buyer feedback throughout the campaign, as well as the intended number of bidders expected on auction day for your property. Your agent and auctioneer will sit down with you (where possible) a few days prior to the auction to set the reserve at a price that you’re comfortable with, as well as being inline with buyer feedback to give you the best possible chance to sell for a great price come auction day. The auctioneer will also run through a few different scenarios that may arise on auction day and make plans to handle them accordingly, ensuring there are no surprises for you and everything runs smoothly on auction day.
What do I need to prepare to buy at auction?
When bidding at auction, it’s important to be completely aware of your obligations as a purchaser if you are successful. To bid, you will need to have unconditional finance approval to a purchase price you are willing to pay for the particular property, as well as have carried out your due diligence and gone through the contract for sale with your legal representative – not to mention you’ve reviewed any available building or pest reports.
How do I bid?
You can either pre-register to bid prior to auction day or register on the day, usually within half an hour before the auction commences. Photo ID is required to register to bid. You will then be given a bidders card which you will need to raise each time you place a bid so the auctioneer can see your intended bids.
I don’t want to go to auction, but I like the house, what can I do?
If you don’t want to go to auction, you can ask the agent to put forward an offer to the owner on your behalf. If this is accepted, you will be expected to exchange under auction conditions prior to auction day, with a 66W certificate and no cooling off period.
Is there any way to ask for something different in the contract?
Yes, BUT don’t do this on auction day. If it’s a change outside the scope of what an agent can change (which in reality isn’t much), it may not be possible. It’s something you need to get legal advice on. Best practice is to get your lawyer to request the change from the seller’s lawyers and then once approved, you have the comfort of knowing you are now bidding on terms you’re happy with. This could be a lower deposit amount, a delayed settlement, or other condition outside of the norm.
In short, auctions are similar to normal sales in the way that the destination is the same: Sold. Auctions however are a different journey, rather exciting and not all that expensive.
Contact Mel Payne
Real Estate Agent and Auctioneer
Ph: 0429 693 287