Buying at Auction

Posted on: 27.07.2016

What is Buying at Auction?

An Auction is an event held by the seller and their agent, whereby the highest bidding buyer on the day purchases the property. For the buyer, this usually means an unconditional contract (with no clauses, for example – pest and building, finance etc.) which is signed on the day of the auction along with placing a deposit. It is very important to be well informed on the terms and conditions that come with purchasing at auction.

Tips for Buying at Auction

If your buying at Auction there are a few things you want to ensure, first, that your finance and borrowing capacity are formally approved. Almost all Auctions will be unconditional contracts, making it important that you, the buyer, have an UNCONDITIONAL FINANCE APPROVAL LETTER from your lender.

It’s also important you research the area thoroughly. What are surrounding properties selling for? Know what the property is worth, establish your highest bid accordingly and stick to it.

Building and pest reports are worth looking into as well. If there hasn’t been a building and pest inspection carried out, it’s definitely worth getting one done. It may cost you a few hundred dollars but it may save you thousands if the property has any serious internal damage.

Get a solicitor, a solicitors direction is highly recommended.

As an alternative to buying at auction, if the pressure of an unconditional contract seems too much for you. You can always ask to make a pre-auction offer on the property with a contract including the usual clauses on a private treaty contract (Pest and Building, Finance etc.).

Summary

• Research the property, the suburb and set your highest price bid before the Auction day.
• Get a Solicitor.
• Have your Finance Unconditionally Approved in writing.
• Ensure Building and pest report is obtained or carried out.

For any additional questions you may have surrounding finance, feel free to check out our other blogs and contact us for a friendly chat.

Good Luck,

The Uprosper Team