Yahoo Finance Are you SCARED to buy a home at an auction?
More than half of prospective home buyers are too scared to buy at auction, and a shocking number don't know the meaning of basic mortgage and real estate terminology.
Research conducted by Westpac revealed that 56 per cent of next home buyers admitted to being too intimidated to purchase real estate at auction, and 46 per cent were not confident they knew what to do.
While auctions have declined over the past 18 months in a cooling market, it is still the preferred mode of sale in popular areas in Sydney and Melbourne.
Westpac home ownership general manager Will Ranken suspects a lack of education frightens property seekers away from auctions.
"Auctions can be daunting, but again, by doing their homework and being well-prepared, home buyers can feel confident to make the most of current opportunities," he said.
"To ensure the best chance of success, home hunters should observe several auctions before they bid; thoroughly research the property they’re interested in; and ask the selling agent for comparable sales."
The research, compiled after input from 1,479 Australians, also showed a worrying number of next home buyers didn't know basic mortgage concepts.
Seven out of ten didn't know precisely what comparison rates are, 49 per cent didn't know what "equity" meant, 48 per cent had no idea what an "offset account" is and 41 per cent didn't know about refinancing.
Related story: 8 words EVERY home buyer needs to know
This is despite 43 per cent considering themselves as "financially confident".
Ranken encouraged potential purchasers to seek advice to go into any transaction fully informed.
"It all starts with an open and frank conversation with a professional to identify any knowledge gaps," he said.
"With the right help and guidance, the process of buying a home can be incredibly rewarding."
Among those surveyed, 73 per cent will educate themselves using a professional while 40 per cent seek said they would seek information through digital means.
Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, news and tech news.
