Pre- auction tips
PROPERTY auctions can be a great place to acquire your next home – if you know what you’re doing. There are many things you must know and understand before diving into this high- stakes/ high- stress process. Here are some tips. You’ll find one that’s is often overlooked
1. Check your financial capacity
This pre- auction tip involves going to your wealth manager and checking your financial capacity. It’s critical to know you actually have the money to buy that property before you even contemplate bidding for it. If you need to apply for a mortgage to buy a property, y it’s good you discuss your our inindicative borrowing capaccapacity with a property finance finance consultant before auction day. Lenders use higher her ininterest rates when checking ecking your borrowing capacity apacity to stress test your abilib l ty to make repayments if the interest rates move upward. You will need written approval and deposit ( around 10 per cent of the purchase price) on the day of the auction.
2. Vet the sale contract
At the back- end of the shiny, new property being sold at auctions are legal issues. You want to sort these out before you go to the auction.
Prior to any property auction, you must get a copy of the contract and show it to your lawyer for review.
Your conveyancer can explain to you any possible risks that come with buying the property you’re eyeing, and at the same time, give advice on how you can be protected from them.
He or she can also point out
some barbar gaining chips you can use during the auction, from a legal standpoint, like longer settlement periods, reduced deposits and/ or additional terms and conditions.
3. Make sure you have a professional building report
An auction sale is legally binding. Therefore you must know about any potential issues with the property before the auction starts.
Too many people rely on their gut feel, which is incredibly dangerous. No matter how shiny or new the home seems, make sure you know what you are buying. Unless you are a builder yourself, get a professional building report done for you. Without it you are buying half blindly or worse.
Find a qualified person to
conduct a proper building inspection for you. This includes licensed builders, surveyors, and architects. These professionals will know what to look for, such as damages or defects to the property that could pose a safety hazard later on. It’s not unusual for some home owners to make cosmetics improvements to their property in the hopes of covering up faults. Your professional inspector will also make sure that the report you will receive meets the Australian Standard for building inspection.
4. Check more than just the house condition
This next one is a favourite pre- auction tip, and something that is often overlooked by many. Prior to any auction, there is usually an open house where potential buyers can check out the property they are eyeing.
However, you should not stop there. If you’re thinking of buying an investment home at the next auction, don’t just check the home itself stake out the neighbourhood as well.
Walk by at different times of the day. Gauge the noise levels, the light conditions and traffic volume. Real estate agents will always try and have the open homes at the best times of the day with the most light and quiet ambience. View the home at other times.
If you can, make an appointment to see the home at a different time of day. You may be surprised. Another expert pre- auction tip is doing your online research. Go on the internet and look for real estate websites that feature the home you’re looking to buy b as well as its neighbourhood. b
You can also find f out what other home h owners are saying i about the area. This way w you’ll know what t to expect before you head to the auction.
5. Visit auctions
Bidding is a skill that you can hone by attending property auctions. This specialised skill is what buyers’ agents have. Don’t let the property auction for your dream home be the very first one you attend. Go and see auctions, and interact with real estate agents, buyers agents, and auctioneers.
You will pick up the language they use and even learn strategies that you can use by the time you bid on a property. By experiencing what it’s like being in an auction room and seeing how property auctions play out, you will gain the confidence one of the most crucial pre- auction tips of all is to prepare your bidding strategy before auction day.