Sale by Auction

BUYING A PERTH HOUSE AT AUCTION
SALE BY AUCTION

Over in the Eastern States it is more common to see homes for sale by Auction.

Here in Perth that is not the case, most homes are sold through a method known as “sale by private treaty” which is, sale by offer and acceptance.

However, buying a Perth house at auctions is becoming a popular method of selling homes. It is a methd favored when there is potential for a number of interested parties which may lead to the property being sold for a higher price than if it was sold at pivate treaty.

Another reason for selling at aucttion may be if a quick sale is required (for example if it is a foreclosure sale).

The property may be passed in because it has not met the reserve but then that opens  up the opportunity for negotiation  with interested paries.

What is Sale by Auction?

Buying a Perth house at auction is a form of property sale whereby the property is available to bidders at a sales meeting conducted by a licensed auctioneer.

How does the Auction process work?

The seller will allocate a reserve price to the Perth property prior to the house auction commencing. The reserve price is the lowest price that the seller is prepared to sell the house for.

The auctioneer will ask for a first bid to start of the bidding. Early bidding is generally below the reserve price. The auctioneer will manage the bidding process on the Perth house auction as the bids progressively increase until such time as there are no further bids on the house.

If at this point the house has reached or exceeded the reserve price, the auctioneer will tell the bidders that the house will sell today. The winning bidder will then complete the transaction on the Perth house by signing the relevant paperwork. The auctioneer accepts the offer on the house on behalf of the seller.

What if the Perth house does not reach the reserved price?

If the house fails to reach the reserve price at auction then the housedoes not sell. It is at this point that the auctioneer will generally enter into private negotiations on behalf of the seller in order to sell the house outside of the auciton.

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What happens once the property is sold?

Once the house has been sold at auction the settlement procedure continues in the same manner as that when a home in Perth is sold by offer and acceptance.

At the close of the auction a deposit of 10% is paid and the contract is signed. The balance of the purchase is paid in full at time of settlement. (The settlement date is included in the conditions of sale)

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Is it true auctions are cash sales

Yes it is true, generally property for sale at auctions is a cash sale only.If you intend to buy a property at auction then you need to organise your finance beforehand and have the deposit available on the day. The deposit is payable by the purchaser at the close of the auction.

IMPORTANT If you are buying a property at Auction then you need to do your research and be aware of the property is worth. The last thing you wantto do is bid a too higher price than what a property is worth. It can sometimes be difficult to not get emotional when bidding for a property at auction and pay a highprice just to secure the deal. Attend the auction knowing what your maximum bid is and stick to it. If you are unsure you can’t do this then it may be worth getting someone to do the bidding for you.

TALK TO A MORTGAGE CONSULTANT

If you are buying a house at auction you will need to have your finances sorted out first. If you would like to be contacted by a qualified mortgage broker to discuss your mortgage options for buying a house at auction then complete the enquiry form below.