22 Oct There’s no price – so why bother?
AUCTION properties bring a kind of frustration for buyers. The property is marketed without a price indication and begs the question: How am I supposed to know if the property is in my price range if I don’t know what it is worth?
Some buyers miss out on the possible benefits of buying an auction property because they don’t want to ‘waste their time,’ nor do they want to deal with the disappointment of missing out on ‘the one’. They also worry about offering too much? So why would a seller risk losing a section of potential buyers by not listing their property with a price?
And why don’t sellers make it more convenient for buyers and just put a price on their property?
Sellers adopt the auction selling method because:
They want to achieve today’s top price in the shortest possible timeframe.
They don’t want to miss the mark by overpricing the property and sitting on the market for too long. If that happens, buyers assume something is amiss with the property or the price.
They want to attract serious, ready buyers and avoid a stream of sticky-beaks, other sellers who want to make comparisons against the list price of their own home and buyers who are ready to buy anywhere between – three-month’s-time to a year.
They want an unconditional contract and avoid time-wasting conditions on the contract as well as buyers who can’t really buy until they sell.
They’re keen to move on for personal, family, professional or financial reasons and they don’t want the market to control their timeframe.
They know the premium price will be paid by the buyer who connects with the property on an emotional level, so they’re subliminally putting the property before the price in the mind of the buyer.
When a buyer realises they’re interested in a property with a price they usually think, “I wonder what the seller will take?” When a buyer realises they’re interested in an auction property they have to think, “I wonder what the property would be worth?” It’s this second group the auction seller is most interested in capturing.
But what’s in it for you?
Unlike sellers who are dictating what they want from the market by determining and listing a price – auction sellers are listening to buyers, who they know are scouring the market and gaining up-to-date market values. You have a genuine opportunity to buy at real market value than pay too much on a seller’s dream price.
Imagine a scenario where you find a property you love, compare it to properties with a list price, compare it to recent sale prices and decide that you would be delighted to pay $550,000-$570,000 for the home. Obviously, you’ve either gained pre-approval for this amount or you’re approaching a mortgage broker to find out how much you can borrow and from which financial institution your situation is suited.
You’re now ready to buy at auction and although nerve-wracking, you’re confident of a fair market price for your desired property. You attend the auction with a clear mandate to not exceed your limit.
However, due to whatever circumstances on the day, your bid of $515,000 or offer thereof after the auction if there were no bids, is accepted.
Ask yourself – how would you feel with a saving of $35,000-$55,000?
In nearly all life circumstances it seems the universe mostly rewards the brave – and fronting up at auction to buy your dream home is certainly brave.
The only things standing between you and your dream home is some market research, (attending open homes and learning about recent sales prices), and gaining pre-approval to buy at auction.
To find out what you need to gain pre-approval to buy at auction, call Kelly & Co Financial Services on 1300 54 94 54