Buying at Auction Part 2 - Expert Advice and Finances
Buying a home at auction can be a complicated process, with lots of small legalities and purchase details that should not be overlooked. Here we go through the key people you should talk to.
As you now know there is no cooling off period at auction so if the hammer falls and you are the highest bidder, the property is yours. However so are the costs so hers are some tips to make sure you are prepared. Heres a look at who you should talk to and how to get your money sorted.
Experts and finance - two important elements to get right
Seek Expert Advice
Sometimes, doing your own research is not enough. Buying a home at auction can be a complicated process, with lots of small legalities and purchase details that should not be overlooked. When you want to get the low-down on the fine print of the auction process, you should consult an expert.
Seek a solicitor
Unlike private treaties, auction sales don't have a cooling off period. This means that once the gavel hits the podium, you need to follow through with the purchase. This can be daunting, especially if you get stuck in a contract that gives you the raw end of the deal. Getting a solicitor to look over the contract of sale before you go to auction is an excellent safeguard against any legal hurdles that can trip you up if you complete a purchase.
Contact a conveyancer
A conveyancer can make the buying process simple by conducting many complicated affairs on your behalf. They will also organise settlement fees, stamp duty and many other details for you - a must-have if you are not confident doing this yourself.
A solicitor can be a conveyancer, but not all conveyancers are solicitor - many are specialised. Make sure to ask your contact about their qualifications, and give full details of your situation so they can help you. This includes finances, how much time you have, and whether you want to negotiate down the contract.
By engaging the services of an expert, you will make sure you get exactly what you want with no nasty surprises and the benefit of a specialist working for you.
Get Your Finances Sorted and Set a Limit
As mentioned before, there is no cooling off period at auction. If the reserve is met, the hammer falls and you are the highest bidder, the sale is final and the property is yours. However, so are the costs. Make sure you are prepared!
The first thing to do ahead of going to auction is to make sure you will be able to back up your bids financially. This means engaging the right property lending specialist, and getting pre-approval for a home loan. This puts you in control and will help create a stress free buying process. LJ Hooker Home Loans has a team of property lending specialists right across Australia and are experts in home loans. You get all the services of traditional mortgage broking, but with the added value of unique professional support around property buying right from step 1. As pre-approval can take a while make sure you get yourself sorted well in advance of the auction date.
Work out what you can afford
Before auction, ask if you can really afford to buy this house. Balance up your income, the fees related to your property or loan, mortgage payments and any ongoing costs you might have. If you’re successful at the auction, are you going to break the bank? If so, it is time to try another avenue or save for a while longer.
Know yourself, know your limits
Getting into a bidding war can be a heated affair, and if you lose your head you can bid well over what you intended. Before you go to auction, set your limit and most importantly, stick to it. Do not go over your pre-determined limit.
Have your deposit ready
Generally, the winner of an auction has to pay a deposit on the spot. This is normally 10 per cent of the sale price, so make sure you have this at the ready. Consider bringing your own cheque book instead of a bank cheque as well. This way you can pay the exact deposit amount easily, as it will likely be a mystery to you until the close of the auction - try not to get caught out!
Getting ready to attend an auction? We recommend getting a free property appraisal from our team of experts before you do. They'll be able to give you insight into the property's size, location, how it compares to neighbouring properties, potential areas for growth and much more.