In the previous post, How To Buy A House at An Online Auction, we discussed what to expect when you buy online. We go a bit deeper in this article to discuss what the advantages and disadvantages might be so you can plan to your strengths and weaknesses.
Yes, there are advantages to buying a property via an online auction.
The original benefit of hosting an online property auction is that it removes the risk of face to face contact with people who might be sick. Aside from this though, online auctions open the property to a much larger audience. Remote buyers from anywhere in Australia, in fact anywhere in the world, have the option to check in on the proceedings without having to send a proxy or hire an agent to bid on their behalf. With travel restrictions in place, this is a really big plus for those who are looking to purchase either domestic or commercial property in Victoria.
As long as you have a strong, reliable internet connection then the auction will be free from trouble. On location, any number of environmental elements can step in and turn the tables. Terrible weather or even dreary weather can dampen spirits, especially since bidding takes place outside. Not enough space on location can leave bidders squashed and crowded, making visible bids difficult and even the auctioneer hard to see.
Congested traffic, faulty traffic lights and road work detours are also neatly avoided online. Even just cutting down on travel time (you will most likely be required to move from your kitchen to your computer) decreased the stress and gives you more energy to focus on the outcome you want.
Time to think
Auctions are run rapidly. There is a method in that, to put pressure on buyers, get them nervous, confuse them a little and cause just enough panic to trigger unseasoned buyers into overdrive. When you are calm, when you can take more time, when you can see the numbers on the screen, you are better equipped to think more clearly and respond according to the plan you plan. Taking that emotion out of the buying equation means you are more likely to make a solid choice based on what you need and what you can afford, instead of being caught up in the fever of the auctions rapid pace.
Let's turn it around now and investigate the disadvantages of online house auctions.
As a buyer, there are a few disadvantages and potential risks you need to be aware of. Usually though, once you know where the trouble spots are you can confidently work a way around, or through them.
Going in blind
Seasoned buyers will be able to get a read on an auction audience in the blink of an eye...if there is a visible audience that is. Knowing who your competition is can be a real advantage, so missing out on that in-person view means it's impossible to tell if others bidders are young, a retired couple, an investor, are they anxious, nervous, confident or bored? Who is bidding and when are good reads to have.
Technology glitches and frustrations
If technology isn't your strong suit you may find using new software daunting, stressful and intimidating. If so, you might want to ask a tech-savvy friend or relative to do the button-pushing for you. Just make sure you go over your strategy carefully beforehand so they are on the same page with your buying needs.
It's a good idea to get familiar with the software platform the agent is using so you know your way around. You will need to sign in and agree to the platform terms and conditions, this is best done well ahead of time so you can read through the fine print carefully and be ready to go come auction day.
You also need the set up at the vendors' end to be professional, secure and well presented. This one is out of your control and unknown until auction day.
The rules still apply
An online auction may have a more casual feel, meaning buyers can forget the need to complete the necessary paperwork beforehand to be eligible to bid. Make sure you take full advantage of the bidders' guide which is provided from the agent. This guide outlines everything you need to do to prepare for auction as well as the rules and regulations of the auction itself. The agent MUST provide it to you so be sure to contact them letting you know you are interested in bidding on a particular property.
Online auctions are not as simple as clicking a link and arriving at the sale.
You will need to register as a bidder which includes the agent sighting your proof of identity. You will also need to show that you have the funds for both the purchase and the same day deposit, usually in the form of a bank's pre-approved loan.
As with a regular auction, you must clarify the terms of sale well before auction day and have your conveyancer check the terms for anything amiss. You will need to put in requests for changes well before you make an offer.
Looking for a conveyancer in NSW? Contact us today and let's chat!