There are two main methods of selling a property: by auction or private sale. What’s the difference between the two?
Generally, at an auction, you’ll be bidding against other potential buyers and the highest bidder wins. With a private sale, you make an offer to the property owner through the real estate agent, and there may be some negotiations until both parties can agree on a price.
Also, if you buy by private sale, there may be a cooling-off period after contracts have been signed. You may be able to change your mind during this time, but you could lose some or all of the deposit you paid. On the other hand, a sale by auction is usually unconditional. You should speak to a lawyer.
Before making a bid or an offer consider:
- Asking us about pre-approval so you’ll have a better idea of how high you can afford to bid or offerdisclaimer. (Once you've found the right property, please speak to us about progressing to full approval for your loan.)
- Doing your research: ask us for a free ANZ Property Profile Report which includes a property price prediction.
- Getting a copy of the contract and asking your solicitor/conveyancer to review it.
- Organising building and pest (plus anything else you think is necessary) inspections to make sure you know what you’re in for.
- Making sure you have your deposit in hand, so you’re ready for a successful bid or offer. The most common way to pay a deposit is a personal cheque, otherwise if you have an account with a cheque facility but don't have a cheque book, you can order a counter cheque from an ANZ branch.
Buying at auction
On auction day:
- There may be a final Open for Inspection right before the auction, it may be worth one last look.
- In some states, it's a requirement that bidders register for the auction. (Even if it's not required, some real estate agents will ask that you register anyway.) You’ll need to bring some form of identification such as a driver’s licence.
- If you’re not comfortable making bids yourself, consider asking a buying agent, friend or family member to do it.
- Decide on your bidding strategy. Some bidders choose to lead the bidding, while others prefer to join in later. And some are slow and steady, while others go in hard with large increments. Work out the strategy that works best for you before the auction (including your bidding limit), and stick to that plan.
The bidding process:
- The auctioneer will brief all bidders before starting the auction, so listen to instructions carefully.
- The auctioneer can set the amount by which bids increase.
- The seller will have set a reserve price, which is the lowest price they will accept for the property. They’re not obliged to let buyers know what this reserve price is until it’s actually been reached.
- The auctioneer may place a ‘vendor bid’ as an indication that the reserve price has not been reached.
- If the reserve price isn’t met, the property is ‘passed in’. Then the highest bidder will get the first chance to negotiate a sale price.
Buying by private sale
Making an offer on a property:
- Find out what the offer process is, as this can vary between states and territories and even between real estate agents.
- Set your asking price, or at least the price range.
- You may ask the agent whether other offers have been made.
- Be prepared for negotiations to go back and forth between yourself and the seller, with the real estate agent as the middleman.