The Best Time to Buy Your Home
Different Ways to Buy a Property
There are Four Main Selling Methods
There are a number of different methods available to buy a home in Australia. Some buyers may choose to snap up a property at auction, while others prefer to gauge the market through a tender or expression of interest.
Here is an overview of the four main types of selling methods: Auction, private treaty, tender and expressions of interest.
Also known as a ‘private sale’, this selling method requires the vendor (or seller) to set a price from the start of their campaign.
This enables them to receive and consider offers from prospective buyers throughout the time the property is listed for sale on the market. Through this method of sale, the owner can choose to extend their campaign.
As a prospective buyer, you can submit an offer through your real estate agent to the owner and potentially negotiate the price. Once the offer has been accepted by the owner, there is a cooling off period. This is where certain conditions must be met in order for the sale to go through, such as obtaining finance or a sound home inspection.
Auctions are a very popular buying method in Australia, as there is a chance of snapping up a property quickly at a good price.
Before the auction day, you can make a pre-auction offer to the owner through the real estate agent. This is where you can submit an offer of how much you are willing to pay for the home. However, in order for your offer to be successful, it needs to be an amount that will attract the owner’s attention.
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You will need to register your bid on the auction day to begin bidding on the property.
The owner will have set a minimum reserve price they are willing to accept for the property. If the bids do not meet or exceed this price, the property may be passed in, or ‘withdrawn’.
Should this happen, there could be an opportunity for you to negotiate a sale with the owner.
Some sellers allow part of the deposit to be paid at the end of the auction with the rest on a specific date. This will need to be identified in the contract.
Properties sold by auction are not subject to any conditions, which means you will need to complete an inspection prior to auction day and have your deposit cheque ready to go at the time of sale.
Unlike private treaties, auctions do not have a cooling off period. This means you need to be sure this is the property you want to buy.
Tender and Expression of Interest
These two selling methods are quite similar to private treaty, but they are usually associated with premium properties. They are more formal and both require written offers passed through the agent to the owner.
Expression of interest
You must send an ‘expression of interest’ document to be sent in by a specific date
The property price is not always advertised
- Buyers need to submit a formal proposal as a response to the seller’s tender price
- Buyers compete against one another by submitting offers, but neither party knows how much others are offering, similar to a silent auction
- Properties are usually sold to the highest bid
Buy or Sell First – The Pros and Cons
Which Action Suits You Best
Moving to a new home means you’re going to have to do something about your old one.
But which action will you take? Will you sell it before moving? Or should you jump the gun and secure a new property while still living there? This is the age-old question that owners can spend a significant amount of time thinking over. Weigh the pros and cons of these options to ensure you pick the best one for you.
Buy First Pros
- You will have a home already secured so you won’t stress if your old home sells quickly.
- May have the ability to use equity in your current loan as a deposit for your new home.
- You can spend as much time as you like shopping around for a new home for sale.
Buy First Cons
- You might have to organize bridging finance between the two properties, giving you a time limit. This might limit the time you have to selling your old home.
- If your old home sells at a less than desirable price, you may have to fund the difference in costs.
- You might feel pressured by time and accept a lower offer.
Sell First Pros
- The proceeds from the sale of your home can be used on your new one.
- You will know exactly how much you can spend on your next purchase.
- Time is on your side, so you’ll have the freedom to negotiate deals and offers for a better price.
Sell First Cons
- If your home sells quickly, you could be left to make a rushed purchase on a new home so you have somewhere to live.
- Local property prices could rise in the time between selling and buying a new home.
- You might have to spend more to rent accommodation while between homes.
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