Going to a property auction? The experts weigh in with their top tips!
Following on from our previous blog post “Buying a House at Auction“, we decided to ask some experts to share their ‘top tips’ when considering to purchase a property via a property auction.
PETER ESHO, BUYERS AGENT, EPG
- Make sure that the purchase forms part of the overall strategy. Very often, investors get into the market without thinking about their overall plan. They need to make sure they sit down, think about their wealth creation strategy and ensure that when they do turn up to an auction, they leave emotion at home.
- Follow the fundamentals, make sure you seek independent advice and don’t just fall for the hype.
TONY HARRIS FROM CROWD MONEY
- Buy before an auction!
- Use a professional Buyers Agent!
CRAIG JAFFE, MOSHAV FINANCIAL
From personal experience my top 3 tips would be the following:
- Make sure that you have a pre-approval offer from your bank.
- Do a property & pest inspection or if it is a strata unit review the records of the building.
- Get your solicitor to review the contract of sale to check that there is nothing untoward in it.
AMIT SINGH, MORTGAGE EMPIRE NSW
From personal experience my #1 top tip is to get your finance pre-approved so that you know your borrowing capacity and do not make an offer more than the approved loan amount. If you are the highest bidder above the reserve price, you will have to sign the contract and there is no cooling off period. If you are unable to complete the contract, then you will lose your deposit and may be liable for any damages suffered by the vendor.
My #2 top tip is to research the property, area and any recent sales in the area. Also, go to auctions of as many similar properties in the area as you can and talk to local real estate agents to find out about the local market condition.
These simple tips will help you to anticipate your likely selected property sale price. Again, stick to your price target and borrowing capacity without getting emotional or carried away with the crowd.
COURTNEY MOORES, NASH FINANCIAL SERVICES, WA
From personal experience my #1 top tip is you must “Know Your Limit” when going into the auction. It can be very easy getting caught up in the excitement of being involved in the bidding process but you must know the maximum you can go up to. This ties back to a couple of factors. You don’t want to be paying too much over the true value of the property. You also want to make sure you haven’t exceeded your minimum deposit requirements and your ability to make the monthly mortgage repayments.
From personal experience my #2 top tip is you must do your research on the property and the area you are buying into. Quite often with the auction being a set-date sale, the time frame for due-diligence can be shorter. If you are interested in the property and it’s only available on a short time frame you must set aside time to do your research.
It’s clear that everyone’s suggestion is to get a pre-approval or your finance organised first so that you are well aware of your limit. At LoanDolphin we can help you with your pre-approval by getting the brokers and bankers to fight for your home loan. So there is one less thing to worry about during this exciting process.