BUYERS WARNED TO STEER CLEAR OF ONLINE BIDDING
By Terry Ryder
Home buyers and investors are being warned to avoid online auctions or risk falling victim to dummy bidding.
The biggest risk associated with those who choose to bid online would be the uncertainty of not knowing whether or not there were genuine bidders at the other end, according to Real Estate Buyers' Agents Association of Australia president Scott McGeever.
He warns those lured by the prospect of a "stress free" auction without intervention from a third party may quickly find themselves in uncharted territory.
The new service, which will allow potential buyers to participate via live video streams over the internet, will be launched around Australia next month.
Bidders will be able to register online bids and exchange contracts over the internet, place proxy bids and monitor more than one auction from different agents.
McGeever says the concept of bidding for a property online is fraught with danger and has the potential to cost unsuspecting buyers tens of thousands of dollars.
"This is a classic case of buyer beware," he says. "Buyers could find themselves in a situation where the real estate agent will use an online bidder as a stooge. Alternatively the online bidder, unaware of what is actually occurring in the room, starts bidding against themselves.
"Buying property without seeing it is totally different to bidding and exchanging legal contracts over the internet. Being one step removed from the process makes the buyer particularly vulnerable to unscrupulous agents who choose to manipulate the system.
"The only winners out of all of this will be the real estate selling agents who are set to profit from unsuspecting or naïve buyers."
McGeever recommends having an individual representative present during the online auction or a professional buyers' agent who is a REBAA member, to bid on behalf of the purchaser.
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This article was written by Terry Ryder & is taken from the Investor Alert page of the Hotspotting website
http://www.hotspotting.com.au. We highly recommend this website for people interested in real estate.
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