Heidi Armstrong, Director of Operations, State Custodians Mortgage Company, gives 5 tips to buying property at auction.
Buying at Auction
If you are considering buying your new house at auction, here are 5 of my tips to help you prepare for the experience.
Tip # 1 – Property’s value and your limit
Be aware of what the property is worth and what you are prepared to pay. Do your research. Research recent sales in the area where you want to buy. And take the time to get a feel for the property and a feel for the neighbourhood in general and you can do this easily by talking with real estate agents and neighbours about the home. And once you are armed with this information, you can confidently set the limit and then never bid above your limit.
Tip # 2 - Attend other auctions
Attend a number of house auctions before your auction to get an idea of how the process works. Observe auctioneers, observe buyers, observe sellers and see how they behave on the day. It can be a very enlightening and often amusing experience.
Tip # 3 – Have the contract thoroughly checked
Have the property and contract thoroughly checked before auction day, as auction contracts are unconditional and they are not subject to finance or subject to any inspection after the fact.
Organise your finance
On that note organise your finance so that you are able to proceed with the sale if you are the successful bidder.
Tip # 4 – Don’t be afraid to ask for help
Don’t be afraid to ask for help. Look buying a house is a very big decision and it can be angst ridden journey. So consider engaging a buyer’s agent to bid on your behalf at the auction. They won’t get carried away and they won’t let their heart rule their head often like we can.
Tip # 5 – Establish terms before going to the auction
In property transactions, remember everything is negotiable, but when that hammer falls it’s a done deal. So if you’d like to alter the terms of the contract, just make sure you do it before the auction. It’s also a very clever way to gauge the level of interest in the property, because if the vendor refuses your request it could mean that they are actually confident that there is strong interest in that property.
Arrange your finances: So if you are looking at buying at auction and you do need to arrange some finance, then give our loan consultants at State Custodians a call.
For more help visit www.statecustodians.com.au.