Property auctions are another avenue house-hunters can explore
An auction is another marketplace home buyers can check out if they want to widen their property search.
Auctioneer Mary Sai from Knight Frank said the auction method is fast, neat and transparent.
While there may not be as many mortgagee sales - when a bank sells a property it has repossessed because the borrower cannot pay his mortgage - as expected earlier, there are more owners willing to sell via auction.
If you are interested in taking this route you can start by contacting the auction houses to get an idea of the properties on offer.
The main auction houses in Singapore - Colliers International, DTZ, Jones Lang LaSalle and Knight Frank - post their auction dates, venues and available properties online. They usually hold their auctions at Amara Hotel.
Apart from the big boys, there is also CKS, a smaller but long-time player. Recently, new entrants such as Credo Real Estate have also joined the market.
Before the auction
If a property on the list catches your eye, you can arrange to view it before the auction.
Viewing the property allows potential buyers to assess the condition in which it will be sold, auctioneers say.
You should also check the conditions of sale of the property and watch out for last-minute changes.
The auction houses will value the properties and provide a price guide for buyers.
'If it's a mortgagee sale, banks usually provide the reserve price only at the last minute, so we will first get our valuers to give a range of prices as a guide,' said Mr Shaun Poh, DTZ senior director for investment advisory services and auction.
Although an auction sale is conducted publicly when the property goes under the hammer, auctioneers say buyers are free to make a bid before the auction as some vendors may be keen to sell.
And before heading to the auction hall, it is important that potential buyers have a price range in mind so they know how far their bids can go, said Ms Mok Sze Sze, Jones Lang LaSalle's head of auction & sales.
Those who require financing should make sure they consult their bankers ahead of the event, said Ms Sai.
And do not forget to take your cheque book. Should you succeed in bidding for a property, you will have to pay a 10 per cent deposit. Those buying commercial properties also have to pay the Goods and Services Tax on the spot.
During the auction
Upon entering the venue, find a seat in a conspicuous position so the auctioneer can see you and acknowledge your bids, advised Ms Sai.
Bidders should be alert and keep track of their competitors as some properties sell quickly.
They should raise their hands to bid only if they are clear on the price increment the auctioneer has asked for. Increments can range from $5,000 to $20,000 depending on the price of the property.
But if you are keen on buying a property and do not want to pay too much, there is no harm trying for a smaller increment of $1,000, said Ms Mok.
The auctioneer may invite bids from the floor, and that is when bidders can call out a price increment.
Bidders can even make a counter offer, particularly at the start, auctioneers say.
On the other hand, if they are very keen on a property, they can consider a 'jump bid' - a bid higher than what the auctioneer is calling for - to outbid competitors.
Assuming the price has reached $800,000 and the auctioneer is calling for $820,000, the buyer can choose to make a jump bid by offering $850,000.
By doing so, he has taken away his competitor's likely bid of say, $840,000, said Ms Mok. 'A jump bid indicates a strong interest in securing the property and is a good way to cut off competition.'
Finally, when bidding, be decisive, as you are not allowed to retract your bids.
After the auction
'Bidding is buying,' said Ms Sai. 'When the auctioneer says 'Sold', the property is yours. You then sign the contract and pay the deposit immediately.'
There is no cooling-off period. You pay the remaining 90 per cent upon completion of the sale, usually within eight to 12 weeks.
If the property you are bidding for fails to reach the reserve price, leave your contact number as the vendor may decide to sell it later, says Mr Poh.
Source: Sunday Times, 18 Oct 2009
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