It’s Spring time and auction season is in full swing.
You’ve been house hunting for months now and have found the perfect home in the area that meets all your requirements, however it has a big auction sign at the front.
Do you wait for auction or do you make an offer? If you have spent some time doing your research and know the expected price for property in the area; set yourself a limit and see if you can negotiate a pre-auction purchase. If the property still goes to auction prepare to put your hand up to bid.
What you need to organise before the auction:
- Speak with your mortgage broker and confirm a pre-approval on a home loan.
- Set yourself a bidding limit and take into consideration extra expenses such as stamp duty and conveyancing costs.
- Contact the agent and get a copy of the ‘contract of sale’ and have your conveyancer or solicitor inspect it.
- Organise a building and pest inspection to confirm the condition of the property.
- Often you will need to register your intention to bid; this may simply be by letting the agent know you are interested. Some agents will give you a registration number to show each time you make a bid.
- If you are not a confident bidder you can get someone else to bid; you should let the agent know that you have someone bidding on your behalf, in case they require a letter of authority.
- At auction, you are making an unconditional purchase, so have your cheque book ready! You will be required to pay a deposit if your bid/offer is accepted.
The time has come
You’ve done all your research of comparative sales in the area and attended a few other local auctions; now it’s your opportunity to purchase your desired property.
Agents often open the property for inspection 30 minutes prior to the auction, this gives you a good opportunity to arrive early for a final inspection and ask any last-minute questions to the agent.
In the ring of a bell or auctioneer’s singsong the auction will begin!
The auctioneer will start with some routine chat of rules and regulations of running an auction as this is a legislative requirement and then a brief overview of the contract of sale. They will then ask for an opening bid and the show is on the road.
Remember, stick to your limit. There will be vendor bids and pressure from agents whispering in your ear so don’t forget this is a business transaction and don’t get too emotional.
If a property gets passed in at auction it’s not the end of your opportunity to purchase that property. Do consider, the highest bidder has the first right to negotiate. Often houses that don’t sell at auction often sell within the couple of weeks’ post auction.
Congratulations! You can now stand by the ‘for sale’ board and help the agent put the SOLD sign on your purchase while taking a selfie.
Don’t forget to arrange insurance cover on your new home to protect your interest. Finally; phone your mortgage broker with the exciting news. Call DFG Wealth (03) 5976 8426.