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February 2010
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As reported in the article “Owners Turning to Auction Sales” (Sunday Times 27th Dec’09), selling of properties through an Auction is likely to gain popularity in the coming year. Unlike in the past, where “Auction Sales” were congruent to “Forced Sales” of repossessed properties and was commonly believed to be a hunting ground for bargains, more and more owners now are turning to such events organized by professional auctioneers in the hope of getting a better price instead.
If you plan to venture into the “Auction” arena, you should do the necessary homework beforehand else you might leave disappointed. Look out for the advertisements placed by the Auctioneers prior to the auction or visit the web-sites of the respective auctioneers for the details of properties and the auction schedule. Once you have shortlisted the property of your choice, you may obtain more details from the staff in charge of the subject property and even arrange for a viewing. It will also be a good idea to ask for a copy of Conditions of Sales and peruse it thoroughly prior to the Auction; you may even want to seek legal advice if necessary.
Before attending the Auction, you need to obtain in-principle approval from any financial institution based on your budgeted price. Not doing so is akin to going hunting with neither any idea what you are trying to catch or what you need for such a task. During the Auction, communicate your bids for the property either verbally, show of hand or by a distinctive gesture e.g. nodding of the head. Subject to a reserve price, the highest bidder will be the purchaser.
After the hammer is struck, the deal is sealed and the Conditions of Sales (COS) will be executed on the spot against a deposit of 10% of the purchase price. This is unlike the normal purchase through Option where you have 14days to exercise the OTP and a decision not to proceed would mean a forfeit only a 1% deposit. Bear in mind, if you are buying a commercial property, you will have to pay GST of 7% of purchase price. Sales bought under an Auction will usually be complete in 10 weeks.
Armed with the right knowledge and sufficient information, you will be able to bravely take a plunge into what could potentially be a very rewarding endeavor.
For any Housing Loan enquiry, please contact our Housing Loan Specialists at 6100SAVE (7283)
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