Auctions are a fast, practical and effective way to make a home purchase or investment. If you’re considering buying at auction, here are a few pointers to give you a head start over the competition:
- Have pre-arranged finance: it’s a good idea not to place a bid on a property until you have pre-approved finance. It will cost you an enormous amount of money to break the contract if you do not have the finance to complete it. In addition, by having pre-approved finance you’ll have a good indicator of how much you can spend, allowing you to bid within your means.
- Read the contract: source a copy of the sales contract as soon as you can or at least before the property goes to auction. The estate agent should be able to send a copy through, ensure that you receive some legal advice on the contract to ensure it’s suitable. If you’re serious about bidding on the property, you can also negotiate on some terms of the contract before it goes to auction.
- Do your research: research the area, property prices and past and current sales to give you a good idea on what the property is worth. While you might have formed an emotional connection with the property, ensure that the investment stacks up financially and that there are good prospects for capital growth.
- Inspect thoroughly: inspect the property inside and out before the auction and take note of all its defects. Also arrange a pest and building inspection before it goes to auction. What may first seem like a bargain may not be the case if you need to spend money re-doing the plumbing, electrical/structural work, or demolishing an illegal structure on the land under council order.
- Treat it like a business deal: considering the bidding process as a business deal will help you remain objective and make clear decisions. If you have an emotional attachment to the property, ask a trusted family member or friend to bid on your behalf. They will have no emotional attachment and will help you to make clear decisions on the big day.
If you would like to speak to us about how to get pre-approval for a loan feel free to contact our office on (02) 9266 2266. We can also recommend to you legal experts, should you require help in understanding and ensuring the terms within the contract suit your requirements.
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