Buying at Auction versus Buying via Private Sale
Arm yourself with some essential buying skills for purchasing property via auction or private sale.
Both private sale and auction have positive and negative points from a buying perspective.
Once you’ve found your dream home, keep these points in mind when purchasing under either situation.
BUYING AT AUCTION
Purchasing a property at auction involves bidding against other parties, and the competition can get fierce.
For this reason, purchasing at auction is often preferred by experienced or confident buyers. Less experienced or first time buyers can purchase at auction too with the right approach.
- Transparency - Buying a home at auction allows you to see your competition face-to-face, and get an idea of how many other parties are interested in the property.
- Immediacy - It also gives you the chance to make a higher offer than a competing buyer, something a private sale doesn’t always give you the scope to do.
- Gratification and thrill - Moreover, there’s the advantage of knowing the property is yours there and then, rather than having to spend weeks or months in negotiation.
- One of the disadvantages of buying at auction is the limited scope to negotiate the terms and conditions of the sale contract.
- The other possible downfall is the tendency for competition to drive up the purchase price.
- Can be intimidating or overwhelming if you are a reserved person, as there is a lot on the line
- After a final bid is accepted, there is no cooling-off period – you must put the deposit down immediately (think bank cheque with a blank amount, or an electonic direct deposit...not PayPal!)
- Fold 'em: Be careful that you don’t get tempted in the heat of the moment into making a bid that’s beyond what you can afford (or have budgeted) to spend.
BUYING VIA PRIVATE TREATY
A private sale is popular from a buyer’s perspective for several reasons, but top of the list would have to be the control and flexibility it can offer. Note: Terms and conditions of this buying method may vary according to state.
- In a private sale, as a buyer you may be in a strong position to negotiate the terms and conditions of the sale to suit you.
- You may be able to make several offers over a period of time, without rushing or being locked into a binding contract.
- There is often a cooling-off period after your offer has been accepted which also gives you the chance to pull out of the sale should you change your mind.
- Auctions tend to be the method of sale on the most desireable properties
- On the flipside, one of the downsides of a private sale is the possibility that multiple offers may be made to the vendor without your knowledge.
- This can work against you if another party makes a higher offer that is accepted by the vendor, when you might have been willing to make a similar offer eventually.
HOW WE SUPPORT CLIENTS
At Aspiire Mortgage Brokers, we have supported clients through finance arrangement and buying property, including:
- Home Loans
- Investment Loans
- Debt Consolidation
- Commercial Loans
- Rapid Debt Reduction strategies