Hi all,
Having never bought at auction I have a few questions. Am I right in saying that when you buy at auction there's no cooling off period or conditions? If so do people pay for pest and building inspections prior to attending the auction in the hope that they might end up buying the place? This would be a costly exercise if you missed out on the property and ended bidding on a number of different properties.
Have you ever had vendors provide pest and building? I think it's the law in Canberra, they did when we bought there a few years ago.
Rusty
Hi Rusty
Yep – there's no turning back from an auction purchase.
You're right – in the ACT, the building/pest will be made available prior to auction. You'll need to reimburse the seller at settlement.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
That should be law nationwide, it makes the purchase so much easier.
So a question for the forumites… every time people register at auction do you get a pest and building done or take your chances?
Rusty
Hi Rusty
Can't speak for everyone but the vast majority of my clients that go to auction arrange building/pest before bidding.
I know it's a pain in the a** forking out the cash for something that may not eventuate but you are spending a LOT of money on the property.
I had a client recently bail out on an auction property because of issues with the building/pest. If they hadn't of had it carried out, they could have been faced with a larger bill when they became the owners of the property.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Opening the debate about who should pay the B&P etc – it has been argued many times before that if the vendor has a shonky p&b, you may not be satisfied with it and fork out for your own anyway.
My policy is to not bother with property at auction, unless it can be bought for such a bargain that even after paying out for cleaning up any substantial termite mess and such, you're still in front.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
I personally do not buy at auctions. You have to buy a property fast and I like to research prior to buying. Also, I do no like buying blindly and end up paying higher price than if I was buying privately.
mattsta wrote:I personally do not buy at auctions. You have to buy a property fast and I like to research prior to buying. Also, I do no like buying blindly and end up paying higher price than if I was buying privately.That doesn't make sense. You have the same opportunity to do research as with any other purchase.
You view the property, do your research, get finance sorted, do B&P if you want, go to the auction, bid. Nothing blind about that.
And if you end up paying a higher price that just means you have no self control.
I personally love auctions and have bought most of my buy, reno, rent properties this way. Lucky for me lots of people think the way you do. Less competition for me.
Although lately with all the hype with reno shows and the buzz in Western Sydney there are lots of newby's out there and many are going over my limit. Mind you my limit is low. I need instant equity and CF+ after reno.
Agree with Catalyst.
There's no reason why you couldn't carry our a normal due dilligence process as you would on any other property that you're purchasing.
One of the biggest things to consider when buying at auction is getting your finances in order. You need to be reasonably certain that finance won't be an issue.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
As Jamie mentioned getting your finance in order at an Auction is important but you also have to remember no lender will give you an iron clad formal approval on an Auction property so there is always an element of risk.
Talk to your mortgage broker who will probably have a few ideas to mitigate lot of the risk.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I went to an auction last month and the only person that turned up was me! The agent still conducted the auction full knowing that i was interested in buying. Funniest thing ever!
Surprised he didn't bounce a bid off you.
Been to many an on site Auction where the lamp post or the nearest tree has bid.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I did a lot of research about auctions and it just does not work for me. I do not want to take a risk to end up buying a trashy, bad maintained property. A lot of properties end up on auctions after foreclosures. It instantly a red flag for me. Additionally, some auctions do not let you see the inside of the house, which does not work for me since I want to see the property I am buying from every angle and sometimes even more than once. I am glad you like auctions, but it is just not my cup of tea:-)
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