Real Estate Auction Myths Busted
As the global marketplace is becoming more converged, the popularity of real estate auctions is rising tenfolds. Although these auctions are the most transparent method of dealing with properties, there are certain misconceptions associated with the same. In this article, we would try to bust the myths associated with real estate auctions.
The myths that we are about to discuss include everything from believing that your agent and the auctioneer are in competition with you, to the unlucky beginner’s luck that restricts first-time auction bidders from buying their first property.
Trust issues regarding the agent
After dealing with so many property owners and dealers, we have noticed one common thing. Most of them have some trust issues. They tend to believe that their agent is competing with them. But trust us when we ask you to count these factors out. Your agent is doing what he is responsible for, i.e, he is trying to secure the property on your behalf.
And while doing so, he would aim to secure the deal at the most affordable price possible. In these situations, the property seeker tends to believe that his agent is double-playing on him and willing to deliver the deal to those who are willing to pay more. Here, you might think that the real estate agent may get some higher amount of commission for bringing the highest paying client to the table but in most cases, you are wrong.
A well trained, ethical real estate agent never ditches his client, no matter the sum of money involved in the deal.
There are some more myths to bust. Keep reading to ensure that your mind isn’t filled with misconceptions that would otherwise harm your pockets.
You're opposed by the auctioneer and handler
Many bidders feel they have to work harder to be a successful buyer as they believe they are playing against the agent and auctioneer. In order to secure the estate, they mistakenly believe the agent and the auctioneer are the competitors they have to beat on the day of the auction. In reality, your rivalry is simply involved with other customers.
Vendor offers are dummy
Let us be clear, a vendor offer is not a dummy bid. It is a direct sign from the seller that at the cost of the vendor offer, they will not sell you the house. On the other hand, a dummy bid is unconstitutional because it is a fraudulent bid by someone masquerading as a bidder. Dummy bids are also archaic, obsolete, and can never be used legally by anybody, in addition to being unethical.
There should be a deposit of 10 per cent and a 30-day settlement
With five per cent as a deposit, most sellers feel relaxed. However, different auctions may have different guidelines. Before the auction, the key is to coordinate with the agent and seller so that you can get your own terms accepted beforehand.
First-time homeowners aren’t successful at auction
To buy a house at any point, either at auction or by private treaty, you would have to remain unconditional. Simply put, you can't conditionally purchase a house. All that an auction does is attempt to carry that particular day forward. It's essentially just speeding up the unconditional process. All it means is that, ideally prior to the auction, first home buyers must remain organised. This includes getting your loan pre-approved and completing all the legal tasks ahead of time.
Not bidding is a tactic
Let's take this situation into account, which, sadly, is a common mistake committed by amateur auction attenders. Now consider the following scenario.
There’s a person who has been following up with the property multiple times a week. He has been dreaming about it over dinner for the last two weeks and he has conducted a thorough building and pest survey, apart from property valuation.
If you are this guy, would you like to stand on the auction day with your arms stubbornly fixed by your side? No, right? You would want to raise your arm as many times as possible and make bids that will bring your closer to buying that property of your dream.
The fact is that inactivity is not at all a strategy that winners believe in. Let’s be clear. Without doing anything, you can't physically purchase a house. Instead, you have just opened the door to all those customers against whom you will have to compete eventually. Also, not bidding at all will create a sense of frustration that will haunt you later down the line.
No matter what your views are, non-bidding is a risk-filled strategy and more importantly, it is the worst advice anyone can give you ahead of your auction day. Whether you wish to leave the auction room as a property owner or try to compete till the last cent left in your real estate budget, you must have the drive and the hunger to bid.
You don’t need to inspect before purchasing a home at auction
This is yet another wrong notion that people have. Before the sale day, several auction houses host inspection sessions. Buyers can bring with them a consultant or auditor. If you are not inspecting the house beforehand, you are potentially exposing yourself to a financial threat. Without an inspection, you would never know if there’s any defect in the building that might put the lives and health of your family member at risk. We always recommend that you conduct a thorough inspection session whenever you are going to buy a house.
Jasmine Real Estate is an all-around real estate agency that provides premier service to its clients. Whether you are looking to sell your house or find your dream property, our trained team of workers is here to support you. Call us +61 425 843 786 today.