BASIC TIPS FOR BUYING OR SELLING PROPERTY AT AUCTION

Auctions are one of many methods used to buy and sell property. It is also the worst method, especially if you are the seller. Ask yourself the question, "who really wins at an auction, the buyer, the seller or the agent? Once you have done your research you will see it is almost always the real estate agent.

SELLING AT AUCTION

Should you sell your property using the auction method? No, because you very rarely receive the price you were hoping for or the price the agent has promised you. If you decide to sell at auction you will be asked 'what is your reserve price?' Your reserve price is the lowest amount you would be prepared to take for the sale of your property. Now why would you want your lowest price out there when you are trying to get the highest price possible?

There is also the possibility that your property may be 'passed in'. This means your property did not meet the reserve you set, therefore did not sell. If this is the case, how much has it cost you to not sell your house? The cost of advertising your property and auctioneers fees can run into thousands. Do not pay your agent any money until your house is sold and you walk away feeling satisfied your agent has done the best for you.

BUYING AT AUCTION

All sellers are over-quoted by the agent and all buyers are under-quoted by the agent. Because of this, the buyer could also be "out of pocket' with nothing to show for it. The property has been sold for more than the agent told you it could possibly get and you have now wasted your money spent on advice and building inspections. If possible try to converse with the owners prior to auction and compare quotes given to you both by the agent

A common practice at property auctions is the Dummy Bidder. The dummy bidder is placed amongst the crowd and bids like a genuine buyer. This is to drive up the price of the property. Could you imagine bidding against a dummy bidder only to find out you won the purchase but it cost you thirty thousand dollars more than you could actually have paid.

ESSENTIAL TIPS

There are many tips advising you against buying and selling at Auction. For instance, there is the possibility the auction could only attract spectators and not genuine buyers, the closer the auction gets the agent will start conditioning you to accept a lower price than you wanted and you will also be told how many houses they have successfully sold by auction, when in reality these houses would have sold anyway even if not at auction.

Always investigate other methods of buying and selling your property before deciding on the auction method. Whether you are a buyer or a seller it is your financial future and security at stake here. By not doing your research you could lose thousand of dollars and be caused a lot of stress and heartache.