So, your auction's around the corner and understandably, you're a big ball of excitement inside an even bigger ball of stress.
Don't worry – it's normal.
It's also completely manageable with some mental and money preparation.
Here's what to go over in the lead-up to the big day.
Know
how things unfold on auction day
Ask your agent for a schedule of
procedures. This is a written itinerary that outlines how the auction is
supposed to play out, as well as your game plan – from where you need to be at
different stages, to whether friends and family can attend. The nature of the
auction means it's going to be a relatively stressful day, so knowing what's
going to happen goes a long way to staying calm and nailing the big decisions.
At minimum, go over and clarify the
following info with your agent:
- your reserve, as well as a broad plan of action if it
isn’t met
- how many people are expected to show up
- how you’ll communicate with your agent on the day
- whether any vendor bids will be made
- what the bidding increments will be.
If you're uninitiated in the auction
world, definitely visit a few auctions prior to your own for some invaluable
hands-on experience and a feel for how things flow.
Our
tip
Get familiar with state-specific
auction rules. For example, NSW only allows one vendor bid and in VIC/WA,
interested parties don't need to register to bid, making attendance
unpredictable
Get
to know your auctioneer
Ask your agent who your auctioneer
is and try meet them ahead of the big dance. A great auctioneer can squeeze out
a few extra bids at the finish line, so you'll want someone who can confidently
engage bidders.
Make sure they get briefed by your
agent and that there's a healthy back-and-forth between them. They should do their
due diligence on your house and neighbourhood, but a pre-auction meeting is
essential for going over the basics – like your property's main selling points
and recent sales in your area to reference on the day.
Check
their credentials
If your auctioneer’s a member of
your state's respective Real Estate Institute, you know they've been expertly
trained and have the best data at hand. Find out at the links below:
Our
tip
Ask your agent if you can see your
auctioneer in action to get a feel for their style. If they make you want to
throw your bidding hand up, you've got a winner.
Be
certain on your agent's contract/commission
At this point, you've likely locked
in your agent's rate of commission as either a fixed price or a percentage of
the sale. But it's worth double-checking that there isn't anything ambiguous
about the terms stated in their contract.
For example, you might've agreed on
3.3% commission for a selling price up to $500,000 and 3.5% for anything above
$500,000. This can be cut two ways, giving two significantly different
commission fees: 3.5% commission on every dollar above $500,000, or 3.5%
commission on the entire sale amount.
Our
tip
Make sure you're all on the same
page regarding your agent's authority to sell if the reserve isn't met. No one
likes a surprise sale.
Consider
a bridging loan if you're buying
Selling your home in the morning and
buying a new one in the afternoon. Sounds pretty great, doesn't it? But you’re
far more likely to find your dream property before you sell (and before you
have some much needed funds in the bank). It's the classic homebuyer's
conundrum – and a bridging loan could be your answer.
A bridging loan ‘bridges the gap’ by
providing funding to purchase your new place before you’ve sold your current
one. The value of both the property you’re buying and the one you’re selling
are used to determine a bridging loan—and when you sell your current home, it
allows you to reduce the loan back down in line with your new property’s value.
Taking out a bridging loan might
seem like a no-brainer, but you'll be paying it off on top of your current home
loan, which can get a bit dicey if you're not financially prepared.
It's also crucial to be realistic
about how long your place will take to sell and how much you'll get. The last
thing you want is to come up short for a loan that's had time to accrue a lot
more interest than you budgeted for.
Need a bridging loan?
Contact propertyloans@realrenta.com and we will arrange for a lending specialist to contact you shortly.
Marlene Liontis
Thursday, 14 November 2019
