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When it comes to buying, you have two choices. To buy at auction. Or through a direct sale from a real estate agent or from the vendor. There are advantages and disadvantages to each.
If a property is for sale there is usually an advertised price. That means if you like the property you can make an offer. Base your offer on budget, location, condition of the property and the urgency of the vendor to sell.
Your offer is not legally binding and it also means that other prospective buyers may also make an offer. Get a copy of the contract for your solicitor to review, and organise a building and pest inspection as soon as possible if finance is pre-approved.
If a property is going to auction it usually means that you have to wait until auction day to bid. However, you may be able to make an offer depending on the vendor’s instructions.
On inspection you can obtain a copy of the contract for your solicitor to review, and organise a building and pest inspection before auction. The vendor sets a minimum price that they expect the property to achieve at auction; this is called the reserve. When the bidding reaches the reserve, the house is officially for sale.
Auctions can be stressful so consider hiring a professional to bid for you. If you are successful, you will need to be able to pay a 10% deposit at the end of the auction.
Don’t have a 10% deposit? See our Deposit Power Guarantee
|Buying at Auction
||Buying through Sale|
|There is no ‘Cooling off’ period should you change your mind
||A ‘Cooling off’ period may apply (varies from state to state)|
|Generally, you must pay the full deposit immediately if you are the successful bidder
||You must pay the full deposit when exchanging contracts|
|All reports and inspections on the property must be done before bidding, with no guarantee of a successful bid
||You can complete all reports and inspections before the end of the ‘cooling off period’ (if there is one) – and withdraw your offer if there is anything wrong |
|You are unaware of the reserve price until that amount has been reached
||You are aware of the asking price|
|Competition from bidders could inflate the price
||A higher price can result if a number of people are interested and making offers|
|The offer at auction is subject to the vendors contract terms
||You may be able to negotiate some of the terms of the contract|