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The roles of sellers and buyers are inversely related.
When the situation is in favour of the buyers, it is unfavourable for the seller, vice versa.
If you’re looking to sell your property fast, an auction may be a good idea as your property is placed in front of dozens of buyers without investing in any advertising.
That also means you don’t have to spend months negotiating for the perfect price point as well!
But, selling your property at an auction may result in a price lower than market valuation – simply because how much you get is purely subjected to how much the highest bidder is willing to offer.
So, if you’re rushing to sell your property off in an auction, be prepared to settle for something less than the current market price.
However, some unique properties are given exceptional treatment by the group of property-evaluating experts present in the auction.
Sometimes, these experts may perceive that some unique properties can fetch a much higher price than the price offered by the auctioneer.
Hence, they will try to get their hands on it whenever a profit seems possible, resulting in a bidding war.
If you happen to own an asset like that, then there’s a good chance that it’ll fetch for an above-average price in the auction market.
Otherwise, there’s no reason for you to take the risk of trying to get an above-market valuation for your Penrose condo.
It’s not advisable to put your property on an auction if you can wait – once the auctioneer’s hammer falls, your unit is considered sold even if you’re not very satisfied with the price!
If you’re going to walk in as a buyer, there’s a chance that you can get your hands on some great bargains and deals that is tough to find through conventional means.
Apart from discounted prices, you may also find unique and extravagant properties that are not available in the open market.
On the other hand, the pool of selection is small.
Unlike how you can enter and filter the range of properties based on your preferences on property portals and discover multiple units that match your tastes, these auctions are not precisely the buyer’s best friend when it comes to diversity – due to the limited supply of auctioned properties (around 20 properties are available for the public in each round of auction.)
If you belong to the conventional camp of property buyers who prefer having a pool of selection to choose from, then the auction house might not be your thing.
However, if you aren’t looking for anything too specific, then there’s a chance that you might strike a brilliant deal for a hidden gem out of the properties put up for sale.
When you’re looking to buy, you need to conduct thorough market research on the units listed.
For instance, you should form a clear idea of the additional costs of the property that go along together in its repair and maintenance.
After that, check with the Urban Redevelopment Authority’s (URA) Master plan and the potential developments of the surroundings that are most likely to increase the value of the property in the future.
As you won’t have information on the reserve price as the buyer, there’s no way that you can tell how high or low the seller has set the reserve price.
Thus, one strategy employed by many seasoned buyers is to approach the owners of unsold properties privately.
With the information of the previous asking price obtained from the auction, the buyers can make an informed judgement on the reserve price and leverage on this information when negotiating with the sellers.