Prior to purchasing a property, always ask the real estate agent the following four questions.

1. Why is the property being offered at this price?
2. What price would the owner accept today?
3. Why are the owners selling?
4. What offers have you had?

Private Sale
.: Private sale are based on a set asking price from which the buyer and seller negotiate until a mutual price is agreed upon
.: Can be done privately, unlike the public setting of an auction
.: More time to consider offer, than buying at an auction
.: In most states there is a cooling off period
.: Purchaser can purchase subject to finance
.: Purchaser can negotiate settlement terms

Auction
.: Auctions have a no cooling off period
.: Emotion will often drive up the price at an auction
.: The seller will set an undisclosed purchase price to increase competition among buyers
.: Make sure that you know prices of property in area and then set a limit
.: Remember, you can negotiate if the property is passed in at auction

There are many different types of bidders at auctions.

As a general rule you will find that first timers will often bid at high prices while more experienced investors will be cool and calm and never show their hand.

Professional investors will bid in set jumps and try to take over the auction. If you appoint a professional to bid on your behalf, they will usually only be paid if you are successful buying the property at auction – but always check this detail first.

While dummy bidding is not legal, always watch out for dummy bidders.

Offer Timing
The timing of your offer is often critical to the success of purchasing an investment property.

Look out for properties that have been on the market for a couple of months or have been passed in at auction as the owner had an unrealistic sell price or there were just no buyers.

A good time to purchase property, and make offers that may be under market value is when there is negative media talk or interest rates are about to rise, or have recently risen.

Be aware that in some situations, there may be pressure on the developer to sell remaining properties in an estate, building or area and they may agree to lower offers.

Remember that while the Estate Agent is primarily working for the seller, the agents commission is virtually the same even if the price offered is slightly lower than the ask price. Eventually the Estate Agent will be working for you as they want to get the sale.

Making an Offer
If you wish to make an offer on a property, consider providing a written offer as this demonstrates to the seller that you are serious. Ensure that any offer that you make expires prior to the next ‘Open for Inspection’ so that the owner has to make a decision prior to further potential buyers inspecting the property.

Disclaimer: This information is of the nature of general comment only, and does not constitute professional advice. Readers of this website should obtain professional advice with due regard to their own circumstances before acting