Are there advantages buying at Auction?
- Thread starter WillG
- Start date
There are only a few I can think of:
1. You cannot get gazumped
2. The vendors cannot change their mind about selling or ask you for more money because they got a higher offer
On the other side of the coin, by definition, as the purchaser, you were the only one pepared to pay (this) highest price.
Advantages include price, naturally. After all, if no one else puts in a bid higher than yours and it was still under your limit, then you've done well 
Even better, if no-one bids, you're the only genuine buyer and the negotiating table is all yours at pass-in time I love these situations and have done extremely well for my clients at them, purchasing not only under their limit but being able to also ask for more favourable terms as the vendor needs to sell that day and will reconsider....
Other advantage is often the limited amount of buyers, given that roughly 40-50% of buyers (in my experience) don't even consider auction properties in their searches and pass them by.
Lots of ads for the buyer, depending on which way you look at it.
Even better, if no-one bids, you're the only genuine buyer and the negotiating table is all yours at pass-in time
I love these situations and have done extremely well for my clients at them, purchasing not only under their limit but being able to also ask for more favourable terms as the vendor needs to sell that day and will reconsider....Other advantage is often the limited amount of buyers, given that roughly 40-50% of buyers (in my experience) don't even consider auction properties in their searches and pass them by.
Lots of ads for the buyer, depending on which way you look at it.
Good point. The 40-50% usually includes myself
It was interesting to see Jacque's post - which is coming from the perspective of working to your own advantage in the case of a "failed" auction. Good advice too IMO.
I was approaching it from the other side (which has been my experience of late) where its a pretty hot market in the under $400K sector and virtually everything is selling.
I typically hate auctions because of the uncertainty that, after all your DD and P&B money being spent, there is still no guarantee that you can secure the property. I always try to buy prior if at all possible.
I was approaching it from the other side (which has been my experience of late) where its a pretty hot market in the under $400K sector and virtually everything is selling.
I typically hate auctions because of the uncertainty that, after all your DD and P&B money being spent, there is still no guarantee that you can secure the property. I always try to buy prior if at all possible.
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Will, I have always liked auctions. You know exactly how people are REALLY interested, the decision will be made on that day and it's all done in public.
My pet hate is the "silent auction" situation that goes on with some private sales where you don't know what offers are actually being made. I like to look my competition in the eye!
That said, it's waay easier bidding for someone else because there's no nerves involved. If you really don't like it, find someone to bid on your behalf (just make 100% sure you tell them your walk away price the day before the auction & stick to it).
My pet hate is the "silent auction" situation that goes on with some private sales where you don't know what offers are actually being made. I like to look my competition in the eye!
That said, it's waay easier bidding for someone else because there's no nerves involved. If you really don't like it, find someone to bid on your behalf (just make 100% sure you tell them your walk away price the day before the auction & stick to it).
You're not alone in hating the silent auction process. In fact, there's several buyers who refuse to participate in them as they are fraught with deception and underhanded tactics.
Agree about getting a third party to do the bidding- it's a nerve wracking experience for some buyers and quite different to going over your limit on Ebay in the dying seconds
Are there advantages to buying at Auction? Well, yes, yes, AND yes!
I LOVE auctions! For all the reasons that Jacque mentioned, and more. In a booming market, they can be a source of entertainment as you watch people overpay, but in a market where there is uncertainty and more than a few mortgagee sales they are pure gold.
I don't waste any money on building & pest reports. I get Hubby to climb inside the roof space and underneath. He is an electrician by trade and can fix most things. Building defects don't scare me. As for the pest reports, after having a nasty time with a Company years ago that certified a termite free home when there was a huge nest inside that we found. Some of them are just not worth the paper they are written on. Again, Hubby will do a check (knows the basics of what to look for) & if we are unfortunate enough to miss something, well, we will just fix it ourselves.
I LOVE auctions! For all the reasons that Jacque mentioned, and more. In a booming market, they can be a source of entertainment as you watch people overpay, but in a market where there is uncertainty and more than a few mortgagee sales they are pure gold.
I don't waste any money on building & pest reports. I get Hubby to climb inside the roof space and underneath. He is an electrician by trade and can fix most things. Building defects don't scare me. As for the pest reports, after having a nasty time with a Company years ago that certified a termite free home when there was a huge nest inside that we found. Some of them are just not worth the paper they are written on. Again, Hubby will do a check (knows the basics of what to look for) & if we are unfortunate enough to miss something, well, we will just fix it ourselves.
Auctions are like theatre - you get a backstory (why the vendors are selling), humour, tears, frustration, nerves, tension, disappointment and then at the end everyone claps and goes home
I am an admitted auction junkee. I love critiqueing the auctioneer, his offsider, the bidding tactics of the prospective purchasers, the crowd, the obligatory Greek neighbours at every auction that have no sense of volume control even when the auction is underway
NB Before your start complaining, I am Greek - well OK, Greek-Australian, or is that Australian-Greek. - a topic for another post......
Ok seriously, what I like about auctions. Everything is open and transperant, you see your competition, well in some cases you might be leaning on one. (A tree that or that clapped out old Holden Torana that's been in the same position everytime you have gone to the OFI's).
Are there advantages at buying at auction - No. Its just another way to sell. Its just another method to purchase a property. Its not some mystical method to entrap unsuspecting purchasers. Where however, you are going to potentially be at a disadvantage, is in a good marker, with multiple bidders, emotion will overrun someone, who will push the price up. That's why its the best way to sell when you have interested parties in a good market.
But then again, I am in Melbourne, and we are the property auction capital of Australia/Sth Hemisphere and maybe even the free world
I am an admitted auction junkee. I love critiqueing the auctioneer, his offsider, the bidding tactics of the prospective purchasers, the crowd, the obligatory Greek neighbours at every auction that have no sense of volume control even when the auction is underway
NB Before your start complaining, I am Greek - well OK, Greek-Australian, or is that Australian-Greek. - a topic for another post......
Ok seriously, what I like about auctions. Everything is open and transperant, you see your competition, well in some cases you might be leaning on one.
(A tree that or that clapped out old Holden Torana that's been in the same position everytime you have gone to the OFI's). Are there advantages at buying at auction - No. Its just another way to sell. Its just another method to purchase a property. Its not some mystical method to entrap unsuspecting purchasers. Where however, you are going to potentially be at a disadvantage, is in a good marker, with multiple bidders, emotion will overrun someone, who will push the price up. That's why its the best way to sell when you have interested parties in a good market.
But then again, I am in Melbourne, and we are the property auction capital of Australia/Sth Hemisphere and maybe even the free world
Not wanting to put a downer on auctions as there have been some really great points made about the advantages. The 2 major ones IMO are seeing you competition and the very well made point about taking out about 50% of the competition who won't buy at auction.
As the experience of many of the SS members difers greatly, I thought I'd mention a disadvantage I haven't seen mentioned (sorry if it has but daughter is crook and giving me grief for the 3rd night in a row) is the fact that you have no finance clause available at an auction. For those pushing high LVR's (and no available equity elsewhere) or tight on servicing issues could arise if the lender required a valuation and it came back softer than the PP. This could put a dampner on any pre-approvals in place.
Regards
Steve
As the experience of many of the SS members difers greatly, I thought I'd mention a disadvantage I haven't seen mentioned (sorry if it has but daughter is crook and giving me grief for the 3rd night in a row) is the fact that you have no finance clause available at an auction. For those pushing high LVR's (and no available equity elsewhere) or tight on servicing issues could arise if the lender required a valuation and it came back softer than the PP. This could put a dampner on any pre-approvals in place.
Regards
Steve
I like to live dangerously
. I once called mum on a Saturday morning and suggested we take a stroll down to see what the house several doors down from one we already owned, and exactly the same as ours, goes for at an auction on site.When we walked in, with three of my brother's kids and my dog, the different coloured shag pile in every room and tar stains on the walls were so appealing that we looked at each other and said "if this goes cheap, we should buy it".
When the bidding was too low for us to let it go, we started bidding and got it. The neighbours who knew us thought we were mad. We thought we had bagged a bargain.
We didn't know if hubby and I could get finance for it so we put the contract in hubby's name and mum's name. Then we had to both go home and tell our prospective husbands that we had bought a house
.Hubby said "that's good". My dad was not so happy, but he is very happy now that it has doubled in value plus some.
No point to this story except to say that the lack of a finance clause can be a killer at an auction. I would NEVER had bid on this house if I didn't know that should finance not come through for us, that Mum would have lent us enough money to allow it to settle and we would have sorted it out privately.
As it turned out, we managed to get finance for half. I so wish we could have financed the whole thing, but half is better than none.
I can understand why some people avoid auctions.
I'm looking at an auction property.
My solicitor has looked at the contracts and asked for amendments, their solicitor has agreed to them. I've checked strata.
I've made an offer which was refused as they want to proceed to auction.
Now I go to auction. If I don't get it all that has been a waste of time.
I can't ask my solicitor to do that too often. He did it for me once before (well for my daughter) and she didn't get it.
I think they work on that fact. ie that you have invested time and maybe money so you have a vested interest to make the sale. Thereby maybe offering more than you intended.
I have my limit that's it.
Please give me strength to walk away.
I'm looking at an auction property.
My solicitor has looked at the contracts and asked for amendments, their solicitor has agreed to them. I've checked strata.
I've made an offer which was refused as they want to proceed to auction.
Now I go to auction. If I don't get it all that has been a waste of time.
I can't ask my solicitor to do that too often. He did it for me once before (well for my daughter) and she didn't get it.
I think they work on that fact. ie that you have invested time and maybe money so you have a vested interest to make the sale. Thereby maybe offering more than you intended.
I have my limit that's it.
Please give me strength to walk away.
Auctions are like theatre - you get a backstory (why the vendors are selling), humour, tears, frustration, nerves, tension, disappointment and then at the end everyone claps and goes home
I am an admitted auction junkee. I love critiqueing the auctioneer, his offsider, the bidding tactics of the prospective purchasers, the crowd, the obligatory Greek neighbours at every auction that have no sense of volume control even when the auction is underway
Ha ha - love this description of an auction.. but in addition to the greek neighbours you forgot the little old lady who lives down the road and knew Mr and Mrs Smith who built the house in the 1940's but they move out not long after it was finished. they were a lovely couple before their son got into drug... not that she likes to talk about people... but she is pretty sure that the son and his questionable friends used to use that shed out back for devious reasons, but Mrs Smith was so lovely - she used to wear this blue dress with little yellow flowers on it... dont think she does now that she leaves in the city. When they moved out there were these people who used to let their kids ride their bikes in the street......... etc etc etc etc....
LOL Alabex..... I see from your description of the conversation that you have met my mother-in-law. We cannot hear a story about anything without hearing the back stories of every person or place mentioned. It is soooooooo tedious that I want to choke her .
Not only do we hear the back stores of everyone in the story, but the back stories over everyone in their families too..... who married whom, what they did as a job, etc etc etc.
I am sure you get the idea.
Serenity now!!!!!
.Not only do we hear the back stores of everyone in the story, but the back stories over everyone in their families too..... who married whom, what they did as a job, etc etc etc.
I am sure you get the idea
.Serenity now!!!!!
