FAQS - FREQUENTLY ASKED QUESTIONS
-
What is an auction?
- Timed Auction
- Live Auction
- In property selling we have different method of sale, the normal sale when buyer or seller instructing an agent to find them prospective buyer or desire property.
- Off-plan or project marketing is where the buyers enter into a sales and purchase agreement with an installment payment method (usually these properties start selling during or before construction starts).
- Time share, those properties with multiple owners (usually holiday homes where each owner allowed to certain period to use the shared property).
- Auction, where a property is put up for sale without a set price and buyers compete against each other to purchase the desired property.
- Tender or silent Auction is a process where a property submitted for sale within specific period, all the interested bidders will submit their offer in writing accompany with a deposit cheque usually 10 to 20% of offered price and owners or appointed agent will open the proposal within specific date.
Auction is a system where a property or item submitted for Sale without a set price, the highest bidder shall be the successful purchaser if the reserve price is met, reserve price is the minimum amount which the owner is willing to sell the item or property.
What sort of properties end up in auction?
There are different categories for properties going to auction.
· Luxury, high demand, penthouses, villas, land, buildings, or any special custom-built villas.
· Any property which has defaulted loan and reposed properties, Diseased state, court reposed, and those properties which are unique and in high demand could sell at a much higher price.
What type of auction is there?
What is the difference between a timed auction and a live auction?
· A timed auction is done through computers, and competition between buyers is done through the website only.
· A live auction is more complex, with the bidders able to participate in the auction room or bid via live stream video connection. An auctioneer attends the auction, and real competition is visible for each lot offered.
What are the different methods of sale?
SELLER
What is reserve price?
People who choose to sell at auction can set a reserve price, so they know the minimum amount they will receive before their property goes under the hammer. They will also be in a position to achieve a quick sale that is guaranteed not to fall through at any stage.
Should I sell my property at auction?
Auction ultimately reduces days on market. It creates a competitive environment where bidders can compete for your property or lot and as a seller, there is no doubt that this is the best way to sell your property. When bidders see their competition, there is a sense of urgency to win the property first
Is selling your house at auction a good idea?
If you're looking to sell your house fast, auctions are an ideal option. Providing there is enough interest in the auction rooms, and you set a realistic reserve on your property (generally 75-80% of the market value) , your property will sell quickly at an auction.
What are the benefits of auctions?
Auctions reduce the time to purchase the property. Purchasing and closing dates are known. Buyers know they are competing, fairly and on the same terms as all other buyers. Buyers receive comprehensive information on property via a due diligence packet.
Why online auctions are so popular?
For sellers, it provides access to a greatly expanded pool of potential customers, and the low cost of access makes it easy for individuals as well as businesses to offer goods and services. Most of the survey respondents who participated in online auctions did so only as bidders.
Why do sellers usually prefer auctions?
The simple answer is that auctions involve bidders competing simultaneously, and this benefits the sellers.
Is auctioning your home is a good idea?
Auctioning a home confers a few advantages to sellers: Your buyers are pre-selected, pre-qualified, and ready to buy. Auctions are very fast. You won't have to carry homeownership costs for months.
Is it better to auction or sell a house privately?
Will my home sell for less If I auction It than if I sell it myself, Not likely. Auction marketing exposes your house to a broader audience of buyers and competitive bidding meaning you sell it to the person willing to pay more than anyone else. That's market value!
Is a personal or company cheque acceptable as a security deposit?
NO, only a bank cheque or direct bank transfer allows the bidder to participate in the auction.
Where and when each property can be viewed?
There would be an open house inspection announcement for each property. Document and other essential information can be viewed on our website.
When the successful bidder needs to finalize their payment?
The remaining balance on the property need to be paid within 20 working days.
Can a seller back down after the fall of the hammer?
No, selling the property after the fall of the hammer is considered to be final.
What is the process for selling a property on behalf of another person or company?
The seller must provide a power of attorney certified by a notary public or memorandum of association authorizing him or her to enter a buying or selling contract on behalf of a company Copy of passport, copy of Emirates ID of the owner of the property, and POA must be presented, those overseas power attorneys need to be certified by UAE Department of Foreign Affairs.
What is the process of buying or selling a property with a tenant?
Seller will organize the adjustment to selling price however the vacating property at the time of sale or at a later stage is not the responsibility of the seller or Response Auctions.
Is this possible to Sell a property before the Auction?
Yes, in some cases it is possible to sell a property before Auction Day, but the Auctions fee and charges are still applicable.Cost of selling property in Auctions 1. Response Auctions booking fees 2. Valuation fees (depending on the property) 3. 1% selling price paid to Dubai Land Department 4. Administration cost to Response Auctions 5. NOC cost from Developer.
BUYER
What is the benefit of buying at auctions?
The benefits of buying at auctions include expanding your options and possibly purchasing at a discount. You may face less competition to buy an auction house compared with buying traditionally, but you will also be dealing with a different pool of potential buyers—often, experienced investors. Auctions reduce the time to purchase the property. Purchasing and closing dates are known. Buyers know they are competing fairly and on the same terms as all other buyers. Buyers receive comprehensive information on property via a due diligence packet.
How does buying a house at an auction work?
At an auction, prospective buyers bid increasingly high prices, competing against one another, until the highest bidder emerges at the end. The highest bidder, then, buys the house at the auction provided the highest bid exceeds or reaches the reserve price. Otherwise, the house is 'passed in'.
Are houses cheaper at auction?
By making the negotiation so public, the buyers have a tremendous advantage over the seller. Instead of having to offer their highest price to win the auction, buyers only have to outbid the buyer below them. And this is how auctions get lower prices.
Are online auctions safe?
The majority of online auctions are safe and a great way to gain global access to a wide variety of properties! Online bidding is one of the best ways to ensure you get value for your money. If you inform yourself of the proper protocol for bidding online, you'll be a wise consumer and get a great deal.
What is the difference between an auction and a private sale?
The fundamental difference between a private sale and an auction is that the former has an asking price whereas the latter involves marketing the property without a price.
How to register to purchase a property in auctions?
Copy of passport or Emirates ID 20% of the property value (null on provided guided price) as deposit amount in form of Managers cheque. The payment should be issued in the name of the Dubai land Department (null cheques are refundable at the end of auction in case of not purchasing any property.
Is personal or company cheque acceptable as security deposit?
NO, Only Bank cheques or direct bank transfer allows the bidder to participate in the Auction.
Where and when can each property be viewed?
There would be an open house inspection announcement for each property Document and other essential information can be viewed on our website.
When will the successful bidder need to finalize their payment?
The remaining balance on the property need to be paid within 20 working days.
What is the process of registering the property on the name of successful bidder?
Please refer to settlement process section
What is the process of buying a property with a tenant?
Seller will be responsible for the adjustment to the selling price however the vacating of the property at the time of selling or at a later stage is not the responsibility of the seller or Response Auctions Buyers also understand and agree those properties sold with Ejari and tenancy agreement will continue with terms and conditions and duration of tenancy agreement, should there be any claims in the future, they will be handled by the buyer through Rental Disputes Centers. Buyers also agree that any losses resulting from disputes relating to eviction, refund of paid rents, and any other matters relating to the property or its facilities, or the beneficiaries must not involve Response Auctions and its employees, owners, contractors, Buyers agree and understand Response Auctions and previous owners will not hold any commitment, responsibility, consequences, guarantee or compensation whether on penal, civil, commercial, legal or contractual basis on the above-mentioned matter.
Is there a limit to buying multiple properties?
No there is no limit for purchasing as long as enough funds are secured as a security deposit, which is 20% of the value.
Can a buyer or seller back down after the fall of the hammer?
No, selling of the property after fall of the hammer is considered to be final.
What is the process for buying a property on behalf of another person or company?
The bidder must provide a power of attorney or memorandum of association authorizing him or her to enter a buying or selling contract. Copy of passport or Emirates ID of the buyer must be presented.
Is it possible to buy a property before the auction?
Yes, in some cases it is possible to buy a property before the auction day, but the auction fee and charges will still be applicable.
Do I need to register to bid online?
Yes, all online bidders will be required to register online at least two working days or 48hours before the commencement of an auction.
How do I bid online?
Bidding online is not difficult, please make sure you completed the registration process and log in to the bid live section before the time and date of the auction or watch the “How to bid online “ demo video.
Is it possible to accidentally place an online bid?
No, this is not possible, every bid placed online must be confirmed by the bidder before it is submitted to the Auctioneer.
I plan on purchasing the property with my partner, do we both need to register as online bidders?
19. I plan on purchasing the property with my partner, do we both need to register as online bidders? No, only one of the parties needs to register as online bidders. Should you be successful in the bid please be sure to advise the selling agents.
What if I forget my passwords?
1. Open up to log in section 2. “forgot password” 3. You will be redirected to Response Auctions from there enter the email address you registered with 4. You will receive an email, click the link to change your password 5. Enter your new password.
Can I cancel or deactivate my accounts?
You are unable to cancel your account if you have registered to bid for a property, however, you can deactivate your account at any time within your account setting.
What is a vendor or owner bid?
A vendor or owner bid is a bid made by the Auctioneer on behalf of the vendor (null of the property). It’s not a bid to buy the property and is used to keep the bidding moving forward.
What does on the market means?
If an Auctioneer announces “the property is on the market” this means it has reached or exceeds the reserve price set by the vendor and is going to be sold at auction.
Will I be informed of the reserve price prior to auctions?
No, The reserve price is kept confidential, although it may be disclosed during, or at the conclusion of the auction.
What is a reserve price?
The reserve price is a price stipulated by the vendor as the lowest acceptable price the property can be sold for at auction.
What is bidder number or bidder card?
A bidder number or bidder card is provided to registered bidders before an auction commencing Bidder number or bidder cards will have a number recorded on them which is used to identify registered bidders.
What does “sold” prior to auction mean?
If a property has been sold prior to auction this would mean that an offer had been made on the property pre-auction and accepted by the property owner.
Is it illegal to have dummy bidders at an auction?
Yes, individuals found to be dummy bidders at an auction may be prosecuted and fined, as can the agent and auctioneer if they were involved in the arrangement.
Is the auctioneer required to announce if the property is on the market?
No, it is up to each Auctioneer.
When you buy at auction, are you able to negotiate special conditions?
Yes, although these must be worked out and confirmed in writing before the auction commencement.
What does it mean when an auctioneer says “the property has been passed in”?
If a property has been “passed in” it means that the “reserve price was not met and therefore the property was not sold at the auction.
Can an owner renegotiate the price after an auction?
No, this is not possible.
Do I need to register to watch an Auction?
You need to register but you don’t need to be a bidder and pay the deposit.
Can I make an offer on a property before an auction commencement?
Definitely, selling agents often welcome pre-auction offers.
What happens if the property doesn’t meet its reserve?
Properties that don’t meet reserve are passed in.
What is “due diligence”?
Due diligence is the examination of every aspect of a property.
What are the penalties if the highest bidder does not complete the purchase of property that is won at the auction?
Failure to complete the purchase will find the individual in breach of the contract and may see them significant penalties, including forfeiting the deposit paid.
What is a price guide?
A price guide is an estimation of price and marketing figures which is used to guide potential buyers as to how much a property could be worth, based on recent sales of comparable properties or valuation reports. Disclaimer All information contained within the frequently asked questions is general information, advice, recommendations, and answers. The information does not take into account the particular needs and circumstances of individuals and companies, or laws governing auctions. Before bidding at auction you may wish to seek independent professional advice. Every effort is made to provide accurate information, however, the information contained with the frequently asked questions are subject to change at any time Response Auctions gives no assurance or warranty that information is correct and takes no responsibility for any information provided.
Cost of purchasing property in Dubai
A price guide is an estimation of price and marketing figure which is used to guide potential buyers as to how much a property could be worth, based on recent sales of comparable properties or valuation report.
AGENT
What is the benefit for agents to participate in property auctions?
Here’s a look at exactly what a real estate auction is and how it is a beneficial choice for all parties. It is an intense and, accelerated real estate marketing process that involves the public sale of any properties.
Are brokers receiving their commission when they list a property for sale in Auction?
Yes, they will receive a commission from the property owners whom they represent.
Are brokers receiving their commission when they are representing their clients to purchase in auctions?
Yes, they will receive a commission from the buyer since they are considered to be buyer’s agents.
How does Response Auctions benefit from agents in buying and selling in auctions?
Response Auctions will receive administration fees for conducting property Auction.
Why should agents encourage their clients to participate in property Auctions?
There are enormous benefits for agents and their clients to participate in property auctions such as, • Quick transaction, saving time and money • Reduced marketing time • All participants serious about buying and selling • Buying and selling is final by fall of the hammer • Chance to find bargains for buyers • Quick transaction for sellers wishing to dispose of the property quickly
Are property auctions safe?
Property auction is the safest way to do the transaction especially in Dubai since a valuation report is mandatory.
How can the agents be guaranteed their commission?
Agents participating in simulcast auctions can have their clients join the auctions in their office and finalize the purchase and selling by completing form F as soon as their client bid is successful.
Where and when can each property be viewed?
There would be an open house inspection announcement for each property. Agents representing the sellers shall organize the open house and the agents representing the buyers will accompany their clients to the open house. Property documents and other essential information can be viewed on our website, and the names of the buyers can be submitted by buyer’s agent to protect their privacy and secure their entitlement.
Is there an auction training for agents?
Sure there would be, Response Auctions will provide agents with training to explain the auction process in detail, helping them address possible questions so each agent can be comfortable to respond to their clients in total confidence.
Are there a code of conduct and terms and conditions for agents?