Take a hammer to your auction day fears
Queenslanders are shying away from auctions with a study finding more than half of buyers in the Sunshine State are too scared to buy property under the hammer.
The latest Westpac Home Ownership Report found prospective homeowners in Queensland were apprehensive about auctions, with 55 per cent admitting they were too scared to buy at an auction and 48 per cent saying they weren’t confident they would know what to do.
Auctioneer Haesley Cush (pictured) said he wasn’t surprised by the report’s findings because of the small percentage of properties Queensland sold at auction. He said the lack of exposure to auctions, especially across generations, meant buyers were reluctant to trust an unknown process.
“In other states where there are higher proportions of properties going to auction, you have less reluctance from buyers to engage with auctions,” he said.
“Though I think if you surveyed buyers in Brisbane’s inner city suburbs you would find a higher number would be prepared to buy at auction, as they are more familiar with the process.’’
Mr Cush said buyers shouldn’t be afraid of the auction process as it was the most transparent way of purchasing a property.
“If you buy via private treaty, you have to put in an offer, fill out a contract and wait for the owner’s response. If there’s another buyer, you have to guess what price they’re going to pay and you don’t have the right of reply.
“At an auction, you get to yell out your price, you don’t have to fill out any paper work for your offer, just register to bid, and you don’t have to worry about the validity of other buyers as they’ll be yelling out their prices too.”
Mr Cush’s advice for buyers nervous about buying under the hammer was to speak to agents who specialise in auctions and attend auctions to see the process play out.
He said that when it came to auction day, potential buyers didn’t even have to be the ones raising the paddle as they could enlist the help of a buyer’s agent, a friend or family member, or they could bid via the phone or internet.
Will Ranken, Westpac’s general manager of home ownership, said buyers could increase their confidence by doing their homework and being well-prepared.
“To ensure the best chance of success, home hunters should observe several auctions before they bid, thoroughly research the property they’re interested in and ask the selling agent for comparable sales,” he said.
Mr Ranken said it was important for buyers to do their research to understand other loan services available to prospective buyers, such as a bridging loan or portability loan.
The Home Ownership Report also identified education gaps among Queensland buyers when it came to home finance, with many admitting to not fully understanding key financial concepts.
Almost half said they weren’t sure what equity was, 65 per cent didn’t know what comparison rates were, and 38 per cent admitted they did not completely understand the purpose of an offset account.
However the findings showed 81 per cent of surveyed Queensland buyers were taking steps to educate themselves on home financing by turning to professionals (76 per cent) and leveraging digital resources (42 per cent) to better understand what’s involved in buying or financing a home.
HAESLEY’S TOP TIPS TO CONQUER YOUR AUCTION FEARS