Whether you are buying your first home, or relocating, purchasing property can be daunting. If you are considering buying at auction then the experience can seem all the more confronting. The experience need not be a daunting one as long as do your homework. To assist you, the following information may provide some guidance as to what to expect and how best to prepare for the big day.
An auction provides the venue through which buyers and sellers come together to permit interested buyers to make bids on property they wish to purchase. If you are the successful bidder at an auction, you will be required to sign the Contract and pay your deposit then and there. Most importantly, if you buy at an auction, you are immediately bound by the terms of the contract. It is for this reason that you need to attend an auction well prepared.
Being prepared means, at the very least, thinking about the following:
- A couple of weeks before the auction, ask the real estate agent for a copy of the contract. You should then take the contract along to your solicitor and have them explain the terms of the contract to you to ensure that you know what you are purchasing before committing yourself at auction.
- Next, you should consider whether you wish to obtain pest and building reports for the property. If you find termites after the auction, it may be too late to do anything because your rights to claim compensation are very limited.
- If you are borrowing money to finance your purchase, it is crucial that you make sure you have formal finance approval in writing from your lender. If you purchase a property at auction without formal finance approval and there is a hiccup in getting your finance before settlement, then you risk losing your 10% deposit and the property. You also need to speak to your lender about arranging to have a deposit ready to hand over on the day of the auction.
On the day of the auction, the real estate agent will provide you with a bidder’s guide. This guide contains important information for would-be purchasers intending to bid at an auction. One final tip would be to attend an auction or two as a spectator to familiarise yourself with the auction process.
At Everingham Solomons we can help answer all your questions about buying or selling your property at auction because Helping You is Our Business.
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