Buying Real Estate Part 6 - Different Ways to Buy a Property
Understanding the Different Methods to Buy a Home
There are many 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.
Ultimately, it all depends on the house you want to secure and the method you feel most comfortable with.
Auctions are a very popular buying method in Australia, as there is a chance of snapping up a property quickly at a good price.
- Usually a fast transaction, and sales are unconditional
- No back and forth negotiating between seller and buyer
- You might be able to submit a pre-auction offer to the seller before auction day
- Can be stressful due to competition from other bidders
- Sales are unconditional, so you need to have appropriate finance
- Fierce competition may lead to you paying more for the home
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.
- You can submit conditions to the seller in your offer (unlike auctions)
- There is no set reserve price - it's solely the seller's decision
- Your offer will be submitted privately, so others won't know what you have submitted
- You will need a deposit when you submit a formal offer to the seller
- You won't know how much other buyers have submitted as offers are confidential
- There is not an asking price advertised for the home
Also known as a 'private sale', this selling method requires the vendor (or seller) to set a price from the start of their campaign.
- Can be less stressful, as you have time to think about decisions and submit offers
- You can negotiate terms and conditions with the seller
- You will know the asking price for the property, giving you a good idea of what to offer
- Can be competitive and the agent doesn't always have to tell you the exact competing offer amount
- May be a longer time frame due to contract exchange and settlement
- aThe property is not 100 per cent sold once the seller accepts your offer