Danger at mortgagee auctions
and have your interest as purchaser noted.
It is then on the insurer to notify any interested parties should the cover be let lapse or cancelled.
Unfortunately there is still likely to be an exposure to wilful damage where a purchaser’s only resort may be through the courts, dependent on the circumstances.
• Get legal advice. Ask your solicitor to check through the auction agreement and title fi rst.
Look for clauses that may impede you. You have no right to object to any defects in title and you will wish to ensure that any caveats will be discharged on sale or before. Otherwise they will be your responsibility.
• Will you be able to get the occupier out? If the property was a rent-to-buy you could find the ‘ tenants’ thought they had rights to buy the property and be unwilling to leave. This will be your legal problem to remedy.
• Can you inspect property prior to auction? Removal of items, if not property damage, is not uncommon in mortgagee situations.
• Is the property sold ‘as is, where is’ or with vacant possession?
• Get a mortgage pre-approval. Work closely with a broker or advisor on this to ensure your pre-approval covers your situation.
A broker or advisor like us will also make sure you are aware of likely pitfalls and help you manage a potential situation before it develops.
Buying a property at auction can be an awesome experience. It is not something to go into with your eyes closed but you could just steal yourself a bargain if you understand the playing field.
If you are considering such a move or just want to get into property investment, please contact us to get all the help you could wish for.
• Allistar Walker is a Senior Fellow of Financial Services Institute of Australasia and an accredited mortgage/insurance advisor. His full disclosure is available at www.mortgagehelp.co.nz or he can be contacted at 410 6023 and enquiry@ mortgagehelp.co.nz.