This article presents the auction guidelines for first-time buyers. It will discuss what is involved in an auction, the bidding procedures, and the things that one needs to prepare in order to bid.
What is Auction?
By definition, an auction is a way of selling the property through the public negotiation process. If you are thinking of buying a real estate property, property auction in Singapore is probably one of the best options to get yourself involved with because it allows you to publicly negotiate the price, which assures you that you are indeed paying the real market value of the property at that time.
Bidding Process Overview
Once the auction opens, the auctioneer will begin asking for an opening bid and nominate increments to raise the amount of the bid.
If you want to place a bid, you can raise your hand or simply call the attention of the auctioneer. Once the reserve price of the property is reached, it will be sold to the highest bidder. The reserve price is set by the owner of the property prior to the auction. The price is based on the feedbacks provided by the interested parties during the process of marketing.
How to Register Your Interest to Bid
If you want to take part on bidding for a property you are interested in acquiring, make sure to register your interest. If you do this and the property is already available for auction, the salesperson in charge will contact and inform you to make a pre-auction offer; this is a great opportunity for you to submit your best offer.
Bidding: Types of Offer
A person can only make a written unconditional offer prior to an auction event or during the auction day. The said approach is known as a straightforward offer to purchase in accordance with the set terms of the contract.
If you want to make an offer before the scheduled auction date or buy at the auction date, you must be willing or be well prepared to make an unconditional offer that is in accordance with the policy of that certain auction, which will be made available to the interested buyers.
You must also be ready to pay an immediate deposit after the auction; the usual rate is 10 percent of the purchase price.
What happens after an agreement has been finalised?
Once a contract is unconditional, neither the seller or the buyer can change their mind, and on the settlement day, the buyer must pay the remaining balance of the purchased price.
The buyer will give the payment to the real estate agency, as mandated by the law to hold the amount in an audited trust account that will only be released after a legal authorisation.
The day you take possession of the auctioned property is also the day that the balance of the purchased price must be fully paid otherwise known as the settlement day.
Above is just an overview of how the bidding system works. If you want to have more information, there are resources online that can help you learn more about it. You can also approach a professional who can introduce you to a property auction list that is widely available in Singapore. However, you do it, asking related questions will is a good way to learn the pros and cons of this industry.