Sydney Housing Market Update 23/08/2018
Apart from the obvious dramas playing out in Canberra it has been a fairly slow news week, especially in the world of property.
So I thought I'd take the opportunity to dispel many of the "Auction Myths" that exist for both buyers and sellers under this very unique process.
Believe it or not Australia is well and truly the Auction capital of the world with Melbourne firmly at the epicentre. No other place in the world conducts more Auctions than our southern neighbours each weekend with Sydney a close second.
For many, buying or selling for the first time in this process it is quite difficult to navigate your way through the rules and etiquette we agents see as second nature.
Myth 1 - An Auction advertising campaign costs significantly more than a standard Private Treaty (ie. For Sale with an asking price) one.
Wrong! For the princely sum of about $500 it takes to engage the one hour service of the Auctioneer to attend on the day there is absolutely nothing extra to expend funds on in an Auction campaign. The signboard, brochures, photos, floor plan, website ads, etc. all cost EXACTLY THE SAME irrespective of the method of sale you choose to employ.
Myth 2 - I can purchase a property prior to Auction with a cooling off period.
Unfortunately not. That's the whole point of the Auction, bringing things to a head unconditionally on a said day at a said time and place. If you wish to circumvent all of that prior it won't be with the safety net of a cooling off period.
Myth 3 - I can pay the deposit on Auction day by electronic funds transfer AFTER I'm successful
No you can't. And yes I can hear many of you shout out, "but I did with Agent X recently". Well let me tell you that agent X is pretty dopey and doesn't understand the current legislation we operate under. Embarrassingly we as Agents are still unable to do this because it isn't possible to confirm payment with the money in our Trust Account "immediately upon the fall of the hammer". Yes, the buyer can show us their confirmation transcript but the fact remains until the money is physically confirmed in our account it hasn't been paid and far more worryingly for the vendors we represent, if the buyer decides to cancel that action overnight we have nothing legally binding to hold against them. Yes that's right. If a cheque bounces they have committed an act of fraud but a failed EFT payment is viewed under the eyes of the law entirely differently. Don't believe me? Then do your own research. I'm happy to be wrong on that one and hopefully banking technology will join us all in 21st century very soon.
Myth 4 - The Agent must disclose the Reserve Price.
This is entirely a courtesy and not a right. Before an Auction commences the vendor must set a written Reserve Price that represents the minimum amount they are willing to accept for their property. The Auctioneer and selling Agent have no obligation under the law to let any buyer know what this figure is before, during or after the Auction. It is a piece of information these three parties can choose to disclose solely at their own discretion.
Myth 5 - The Agent or Auctioneer have to publicly announce when the property has met the reserve price.
No they don't. Once an Auction commences and the first bid is made all interested buyers must assume that this figure is acceptable. Even if the current bid is below the reserve price there is no requirement to inform the participants. In many cases the vendor can, upon advice from their agent lower their reserve price during a live Auction to make the highest bid legally binding.
The biggest myth
However is that the agent of an Auction property you are interested in purchasing is unapproachable and doesn't want you to know any of this information. Maybe some are but I welcome the questions. The more the better. It tells me you are a serious buyer and nips in the bud any potential misunderstandings well in advance.
I hope this information is helpful but feel free to contact me anytime.
0412 465 567