Selling property by auction allows prospective buyers to bid against one another face to face (sometimes over the phone) until the one with the highest bids wins the sale.
The method is usually a fast-paced public event that can attract many buyers hoping to snag a bargain.
We recommend that you do your homework, know what a property is worth and set yourself a limit if you intend to buy at auction.
People can often get carried away in the heat of the moment so another good idea is to take a level headed person along to the auction with you who is not emotionally involved with the property for sale.
A thought to keep in mind is that many properties sell straight after an auction.
Before selling at auction, auctioneers usually require the property owner to set their reserve price.
The reserve price is the lowest price the property owner is prepared to take during the auction. The information is only available to the property owner, the auctioneer and a trustworthy agent.
By selling property through an auction, the owner can always receive a pre-auction offer. The offer is made before the auction day, and it is written on the auction sale and purchase agreement.
The offer is also unconditional unless the seller agrees to other conditions.
During the auction, all sales and purchase agreements must be unconditional. This means that the buyer cannot attach conditions to an auction purchase.
However, the buyer can approach the property owner to discuss the auction’s terms or even change the settlement.
Remember, the sale is unconditional as soon as the hammer falls, the buyer is obliged to complete the transaction and this is a great way to find your perfect place to live.
If either of the two parties fails to honour the sale, the matter becomes a legal issue forcing both to seek legal advice.