Like it or not the restrictions put in place to help stop the spread of the Coronavirus outbreak has had a massive impact on so many areas of retail, business management and purchasing. Even the most traditional business setups have been forced to look at online options to be able to survive the current health crisis. One of the industries to step up and reach towards a futuristic operating style is real estate. Buying and selling properties online is now a reality.
Buying your first property is daunting enough without navigating an entirely new process, even seasoned buyers and sellers will be scratching their heads at exactly what is expected and required under these new processes.
To help out, we've put together a list of the essential things to know about buying a house online.
Will I have to buy the house I want online?
For the areas with extreme restrictions in place for Covid-19 an online auction, or virtual action will be in place instead of the regular auction at the property. This enables real estate operations to continue without putting others at risk of infection through close association.
Do I need any special technology or equipment to take part?
All you need to attend the auction is a laptop, phone or any other web-connected device. You must have a strong internet connection that is fast and reliable so your feed is not interrupted at a critical time.
Will the auction be live-streamed?
You will need to check with the agent ahead of time to see what type of online auction will be used. There are two choices, the first is live streaming, which will operate just like an auction would at the property site, with the auctioneer overseeing proceedings to find the highest bid. The second online purchasing option for a property is known as a Genuine Time online auction. This operates more like an eBay auction-style, with a bidding start time and finish time. Without an auctioneer the software programming takes in all the bids and the countdown ends, revealing the winner and final price.
What is the usual timeframe for a property in auction?
For properties "in auction" you can typically expect them to be completed over four weeks, this gives you ample opportunity to carry out the usual due diligence on the property, i.e. pest control checks, building checks and talk with your conveyancer about the contract terms before making a bid. It is essential to check with the agent beforehand to know if any conditions might take the property off the market earlier, or any additional time frames you need to be aware of that could mean missing out on the property if you don't factor them in.
What is the online platform called?
Several different online platforms can be used for online property sales. The type used is up to the agent and vendor, however, they all operate under very similar programs. It is worthwhile getting familiar with the agent's preferred platform, or any of the platforms, before your auction so you know what to expect and how it all works. Typical platforms include GAVL, Anywhere Auctions, AuctionNow, HomeBid, Market Buy, Openn Negotiation, SaleEzy, SoldOnline, and Transaction Room, if you want to start getting familiar with how they work.
Is there a cooling-off period?
No. Just like an on-site auction there is no cooling-off period so you need to be sure this is the right property for you before making a bid. Make sure you have more than one virtual look through, do your third party property checks and have your non-refundable deposit, or funds ready to secure the sale.
What do I need to do before I start?
Make sure you discuss your interest in the property with the agent and check out any requirements that might be needed to register as a bidder. Some of the ID requirements may take you some time to gather if you don't have your paperwork in order. As always, discuss your purchase preferences and options with your conveyancer well before you put in an offer to buy so that you can avoid any mistakes or issues that might be costly, or even cause your auction to fail.
Can the vendor make bids or request friends to make bids online to drive up the prices?
Getting others to place bids to drive up the prices without any intention to buy is called shill bidding. This is an illegal practice because the sale will fail if that false bid is the winning bid. This applies to all kinds of property auctions. However, the vendor can place a bid on their own home to get the bidding moving if they are dissatisfied with the performance. This will be done by the auctioneer who will announce that the vendor is making a bid. The auctioneer will also obey the state laws in place that states how many bids can be made and under what circumstances the vendor can make them.
Keep an eye out for our follow up article in the coming weeks that discusses the advantages and disadvantages of online property purchase. As always, call our office to speak to our expert conveyancing team if you have any questions about your purchase rights.