Auction Bidding Service
There’s more than one way of acquiring a property – the most common are set out below, as Buyer’s Agents we would assist you through the process.
Auction: This is a popular way to buy a property. The vendor sets a reserve price with their agent (the minimum price they will sell your property for) and the agent conducts the auction on the specified date. There are laws for conducting an auction, so it is better left to a professional! If bids don’t reach your reserve price, the vendor’s agent may negotiate with the highest bidder on their behalf. This is where the buyer’s agent has an advantage as we have no emotional connection to the negotiation and we are fully aware of the strategies that the selling agent will adopt to increase the price for the vendor especially if there are more than one interested parties.
It is important to be aware that auctions can result in a higher price for the vendor’s property as there can be a sense of urgency and competition amongst buyers, however the prospect of an auction can also put buyers off. It’s important that as the buyer you have done your homework and also have a firm negotiation strategy, this will ensure that you are in control on the day and do not over capitalize on the purchase. By over capitalizing only puts you’re hard earned dollars in the vendor’s pocket. To understand how the auction work on the day for the vendor see further tips, visit our on auction day section.
Your Maximum Price: You and your buyer’s agent need to work out a price range for the property you are looking to buy, prior to the auction day you and your buyer’s agent need to complete the necessary authorities forms so that your buyer’s agent can bid on your behalf. This authority also allows the buyer’s agent to sign the contract on your behalf on the day keeping your identity confidential and secure. It is important to know that when the auctioneer brings the hammer down on your bid the property is sold and you must have the deposit on the same day as the action, the selling agent will take your deposit and give you a receipt, the standard amount for the deposit is 10% of the sale price at the action, hence why you must know the maximum price you authorize your buyer’s agent to bid for the property on auction day. Your buyer’s agent will be on the phone to you during the auction advising you and seeking your instruction. The property settlement is normally completed around 28 to 30 days after the auction. Your buyer’s agent will walk you through these requirements prior to auction day.
Other types of sales other than Auctions
Listing Price / EOI /Private Sale. The selling listing agent will have an asking price or requesting offers or expressions of interest which can be more appealing to buyers, as the process is less intimidating and easier to understand. Your buyer’s agents is experienced in these sales strategies and can advise you how to proceed with the negotiations. The Buyer’s Agent will have conducted their market research to identity the market value or the property and will attempt to negotiation below the listing agents asking price, so it is important to discuss your expectations with your buyer’s agent to ensure that there is a clear understanding of your expected outcome.
The key to any purchase of a property regardless of what type of sale strategy is marketed by the sales agent, is to not get caught up in the emotion of the purchase process and pay a higher price than your market research has determined for that property. Sales Agent are highly trained in the techniques for building a situation for the purchase where you feel as if you don’t act immediately you will lose the opportunity, at this point you are running on emotional feelings rather than logic.
TRUWAY as your buyer’s agent will advise you to stay within your budget as it is far better to keep looking for the right property at the right price rather than having regrets for your decision in the years to come.
For more tips and tricks including the rules around auctions click on the link below: