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Date Published : Wednesday, February 06, 2008
Uncertain times in the financial market are certain to hit the property market, according to experts, but what about those selling their homes through auction?
Unlike many other countries, Australia has a high take up of auctioned properties, with hundreds going to the highest bidder every week.
For many people buying a house, auctioning can often be a great place to spot a bargain and be able to put money aside for future home loans.
However, during such an uncertain time, those selling in an auction could well be hit. Recent figures have suggested a slowdown in the housing market but, with the Australian Bureau of Statistics recording a 20.2 per cent rise in properties in Adelaide in 2007, sellers could yet be in the money.
General manager of Australian Property Monitors Michael McNamara told the Australian: "The market across the country except for Perth enjoyed a better year in 2007."
For many Australians, the auction process is attractive. Unless something goes drastically wrong, homeowners are almost guaranteed to sell their house on a particular date for at least the minimum price they want. Since auction is a sale through an exclusive agency, where only one agent lists your property, agent fees can often be substantially lower.
After choosing an auctioneer, a contract is signed which is legally binding. The auctioneer has no obligation to let the seller out of the agreement if you are unhappy with the service provided.
The property is then advertised in the local media, open days are organised in the run up to the big day. Once the property is sold, the required deposit must be paid by the buyer, generally any amount up to 10 per cent of the purchase price. The balance is paid on settlement.
Auctioning can be a simple process, but only if in the right hands. It could, though, be a way to beat the uncertain times.
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