Within a day of publishing the auction articles, the views hit close to 200. A few asked about this question. ‘Syndicates in auctions’. I posed this to Mr Stephen soon, the Chairman of Penang Auctioneers Association and he smiled as he replied me. A write up of his reply and some additional notes from me.
Syndicate has a broad definition. For example, they can be property agents who eagerly wanting to win a bid. They can also be genuine buyer teams. In fact they can even be opportunistic genuine buyer who may push away the genuine bidders to give themselves favourable advantages during auction bidding. However, be reminded that if you stay firm, no one can take advantage of you be it in your life or during bidding. We have even met ‘exclusive’ renovation contractors who ‘forced’ us to use their services upon new units obtaining occupancy certificates. Aren’t these also syndicates? Will that stop you from buying new project units?
The truth is, even when we buy new properties, there are group purchasers which got special discounts because they buy in bulk and these people sell earlier making it seem like there are a lot of units on sale. When we buy secondary properties, some owners keep changing his mind when there are more than one interested party. However this has not stopped us from buying new and secondary properties. If so, why are we suddenly too concerned about auction? Again, it is due to people having less experience when it comes to auction.
What buyer can do is simple. Just like buying a house, you would need advice on loan financing, legal documents, professional advice from real estate agency and valuers. The same goes for auction, although not many are able to advise you correctly. In the case of auction, you don’t book a unit by earnest deposit but will be required to pay 5% or 10% upon winning a bid. For auctions, it is important for buyers to look for a licensed auction professional to guide them from A to Z. Get unbiased opinions on pros and cons to bid for the subject property. Furthermore, they should attend a live auction fair to experience its process flow and observe the surrounding. As you know, even when you buy new or sub-sale properties, you also need to put in some effort. The only difference is the approach.
Last but not least, it will not be difficult if you really want to widen your property investment scope. However, to stay away totally from auxctions would be most unwise.
written on 11th jan 2014
Next suggested article: Buy property asap or don’t buy? You decide