In this instalment of In the Know, our conveyancing solicitor Emily Thorn sat down with Tim O’Brien, Principal of First National Real Estate, Mudgee to talk about “OpenNegotiation”.
As many industries shift to completely online platforms, the same can be said for Real Estate, with online auctions being a popular choice for vendors during the Covid-19 pandemic. Tim says there are two main reasons for the shift:
“With a rapidly growing market, no one really knows what a place is worth. And with multiple buyers for every property, in a sellers’ market, going to auction will achieve the best result for the vendor.”
Tim notes that this way of selling is completely transparent. Each bidder receives a number, each bidder is notified of new bids, and if the property meets reserve they are notified. Anyone can watch the auction as it plays out.
“It is just another auction. It is a different way of bidding, but it is still an auction. There is still an auctioneer and the process is still the same.”
Tim notes the following things to consider if contemplating using an online auction platform to sell your home:
Achieve the best price through the power of competition.
The fear of missing out is currently driving the buyers in the market.
Have a pest & building report available to purchase by buyers at a discounted price through the agent. Purchasers may not have time or money to have their own inspections done, especially if the auction ends quickly.
There is no set timeframe to the online auction - it can end at any time, so be flexible in your timeframes.
No vendor bids are available in the online system.
Things to consider if buying at an online auction:
To bid you will need to register on the opennegotation app. Once registered, you are free to place a preliminary bid and then a bidders registration authority will be completed. This is returned to the agent and then the bid is approved to go live.
Do your due diligence before entering a bid – get a copy of the pest & building report and make any necessary enquiries about the property, as you are buying it on an “as-is” basis.
Make sure your solicitor has looked at the contract and been through it with you
Have your finance in place. It is essential that you discuss with your financier that you intend to bid on this property at auction. Do not simply rely on your pre-approval – be auction-ready and have the lender ready to go.
The auction will end when there’s enough interest and enough registered bidders on the property, with 24hrs notice given to registered bidders that the final bidding stage is commencing.
Be organised and get your bid in early, that’s the key to success.
Like a face-to-face auction, if you want a reduced deposit or a “subject to finance” clause, these need to be negotiated prior to placing a bid.
“I admit I am not tech-savvy. So, if I can do it, anyone can do it.”
The biggest upside for both vendor and purchaser participating in the online auction is that as soon as the auction is finished, it is exchanged. The buyer knows that they have secured the property and the vendor knows they have secured a sale. There is no gazumping – everyone has had the opportunity to bid. Tim says that right now:
“There is very little that does not go to auction through our office. Think about it the same as any other auction – you still register, you still bid, it is all transparent, all normal auction conditions apply.”
You can check out First National Mudgee's current listings here:
Emily Thorn is a Property Lawyer at Sally Callander Law. She prides herself on delivering trusted advice and building long-term relationships that help her community continue to grow and thrive. Contact Emily today on (02) 6395 9780 to book an appointment.