somebody contacted me there about buying the property at auction versus buying by
private treaty what's the big difference
the huge and critical and significant difference between buying our auction
and buying by private treaty is that all of the checks that you need to carry out
all of the due diligence all of the research all of the checking of title
all of the checking of planning all the usual things that you're gonna do before
you buy a property and it's sort of a properties must be carried out before
the auction so the option contract is drafted by the vendor or vendors
solicitor all the documents are available beforehand for the auction
everybody has the same chance you can raise your inquiries you can make
inquiries you can carry out as much due diligence as you are capable of but the
bottom line is when the rubber hits the road you go into the auction you are
faced with a contract that is at that point non-negotiable and so if you are
successful you buy the property on the fall of the hammer in other words you
sign the contract you're obliged to sign the contract and you're obliged to pay
the 10% deposit when you sign the contract you need to be absolutely
crystal clear about that before you go to the auction because you could be in
for a rude awakening if you think otherwise in the normal course of events
in a private treaty situation that is a non-action purchase your solicitor can
engage with the other solicitor with the vendor solicitor can ask questions raise
queries and indeed try to negotiate some additional contract terms or special
conditions in the contract and they may be acceptable to the vendors solicitor
and if they are well and good they'll be included and you will have
where your solicitor will have to a certain extent shaped
terms and conditions of the contract but the one at the auction you know in
advance a number of weeks in advance all of the information is available to you
it's non-negotiable the papers are there the title documents are there you need
to carry out your checks and balances as I say and you may need to be absolutely
clear that if the hammer Falls and if you're the highest bidder and you've met
the reserve then you're gonna be the origin of the property and you could be
sued for specific performance to complete the contract if your own able
to complete so if you get a rush of blood to the head you buy a property you
haven't had finance arranged you know you've basically made a
fundamental mistake the bottom line is you need to sign the contract you're
obliged to you must pay 10% and it can't pay the 90% in order to complete the
sale then you're on the hook first you can be sued first and you can be sued
for specific performance and you can be sued for damages and the vendor can
actually sell the property to the under bidder for a lower price and sue you for
the difference so that is the significant difference between buying by
private treaty in the normal way and buying an option now that is the legal
position and that is some factors that you need to consider when it comes to
the legalities and title and so on there's another aspect though that you
need to consider if you're going to an option
my advice is actually to stay away don't go to the auction because of the human
element the human element is something that I have observed over a number of
years I've been a good few options down to the years and say 1986 when I started
buying property and selling property first and I've been both a purchaser and
a bitter and the vendor at auctions and I have seen some stuff at auctions but
the bottom line is this and won't take where you should take from this video is
that the matter what you decide beforehand no matter what you decide in
terms of your bidding limit the likelihood is that in the white
of battle in an auction room it is incredibly easy to get carried away and
therefore you're probably going to exceed whatever you decided beforehand
in fact you would be a person of a remarkable fortitude and discipline if
you didn't get carried away so my advice to you is if you're interested in a
property that's going for public auction you should send along either a solicitor
or an accountant or an estate agent or some professional who is familiar with
the situation to whom you're going to give instructions beforehand and you
will give specific instructions as to the top paid that you can afford to go
and that's it don't change your mind so you have the benefit of making your mind
up valuing the property well in advance of the auction and you then have the
further benefit of having somebody who is going to bid on your behalf who are
not caught up emotionally I'm not going to get carried away they're going to act
on your instructions and they're going to make the bid it's easy as I say to
watch the TV programs and you see people at auctions and the pot in the hand of
putting the paddle up and so on and doing all sorts of stuff but the bottom
line is it is incredibly easy to get carried away
human nature is human nature and if you have your heart set on a particular
property it's very easy to simply slap in another bid and before you know
you've gone 20 or 30 grand over your limit and the property could well be
knocked down to you I hope you find this video useful and if you do give it a
thumbs up down below and thank you for your support on my youtube channel