Loan Help: Auction Checklist – get your home loan pre-approved
Why auctions can be a good way to purchase a home
There are many benefits when you buy at auction. The auction usually has a reserve price; this is a value that the owner of the home would like to achieve on auction day. The eventual sale price can vary by thousands of dollars, and often depends on the number of bidders in attendance.
Hint: Sudden bad weather and other factors could cause a drop in attendees… in your favour!
Do your homework
Before the Bidding Process starts, ask the agent how much they think the property could achieve. Bear in mind that prices can vary quite a lot from what is anticipated, and also that the agent will make the auction sound attractive. Remember that without finance already in place, the auctioneer may not accept your bid.Book a FREE appointment with a professional mortgage broker now!
Hint: Contact AAA Mortgage Solutions for a Loan Pre-Approval before you go to auction!
Before the auction, thoroughly check the following:
- The contract of sale
- The Title documents
- The zoning of the property
- Any mortgages or other arrangements currently affecting the property
- Details of any statutory proposals that might affect the property
- Council permits for any past changes to the property
- The sewerage diagram
- Annual costs like water and council rates etc.
Hint: For more help with how to obtain these, simply ask one of our Home Loan Experts.
What if the auction fails to reach the reserve?
If you make the highest bid, but the property is ‘passed in’ for not reaching its ‘reserve price’ don’t give up! You may still be able to negotiate a deal with the agent.
What if your bid is successful?
Once your bid is successful you’re committed to buy. (There is no cooling off period) You’ll sign a contract and pay a deposit (usually around 10% of the sale price). This can be negotiated, but make sure you speak to the auctioneer before the auction starts.
A bank cheque or cash is the normal way to pay the deposit, although a personal cheque is sometimes acceptable. If you have equity in your current home, AAA Mortgage Solutions can show you how to raise the deposit or arrange a deposit bond.
Buying at auction is exciting and could be your opportunity to get the ideal house at the right price. Have fun!
Remember, you can always talk to us for more help, anytime.