Hi,
i read a homebuyers booklet from the victorian govt that says buying at auction is unconditional. ie) with private offers you can say that you will purchase the property subject to …. (finance or building inspection).my questions are:
do you do the building inspection before the property is auctioned ?
what about a valuation, is this also conducted before the auction ?
if a place is going for 280k-310k and it will be auctioned, would it be safe to assume that the place will go for more ? (ie this is the lower price estimate) – obviously iy would depend on the condition of the property etc, but in general, at this point in time, a lot of places that go for auction seem to go for a lot more than advertised ! is this a correct assumption ?
thanks,
AJHi Aj
Yes buying at Auction is like signing an unconditional contract so you need to ensure that all of your conditions are satisfied prior to the Auction day.
You will need to have carried out your Building & Pest inspection and ensure that your mortgage broker has undertaken the valuation and finance has been approved subject to you providing the lender with a duly executed purchase contract.
If you are wishing to use a Deposit Bond ensure that the Auction conditions allow for this otherwise you maybe required to offer a cheque / cash deposit on the day of signing.
Also if you arrranging finance give yourself enough time to have mortgage documents issued and signed and returned.
Richard Taylor | Australia's leading private lender
You cannot rely on the advertised price range at all. It all depends on who turns up to the auction and how much money they are prepared to pay. An auction can be an emotionally controlled event and if the market is hot the prices can be crazy. It can really be pot luck. I went to an auction a couple of months ago for a new unit development near where I live and there was one bidder. It was quite funny when the Auctioneer asked the bidder to increase their bid to try and put the unit on the market. The bidder refused and when the Auctioneer asked why the bidder said he wasn't prepared to bid against himself. So in this situation the bidder gets first rights to negotiate with the seller if the property doesn't reach the reserve price.
The pre quoted prices are a crock of poop and a waste of time-pay no attention to them. Its amazing how many auctions I have been to where the reserve has been well above the pre quoted range!!!
is there any way to find out what a reasonable price is ? obviously you can go by the median price in that particular area or buy reports, but i don't want to waste time looking at properties that are going to be out of my price range…
Hi AJ
If you are looking in one or two areas (suburbs/precincts) then look at realestate.com.au SOLD props and get an idea on price ranges for varying sized blocks, house/unit size, condition, etc. You've even got photo's to give you a feel for the renovated ones (or not) and maps for location.
Look at the sales figures (for example in Melbourne – The Age every Monday) and compare that to the recent properties you've seen for sale or inspected. Pretty soon you should become confident in putting a price on a particular property just based on a drive-by assuming you've not stepped foot inside and it's unrenovated.
You need to become an expert in an area (or two or three). If you are not sure where you wish to purchase, this needs to be clarified in your own mind first. That way you will optimise your time and not waste it looking at properties outside of your current price range.
Hi Michael,
thanks for that. I think I was looking on domain/realestate for within my price range first, rather than concentrating on a few areas and seeing if there are ones within my price range. I have found the recently sold listing quite useful.
just another question, if prices have decreased in a certain area (for the past 6 months) or past year, is that good or bad for a buyer ?
AJ
you need to ask yourself "why have prices decreased?" If there has been no change in fundamentals of the area i.e: a major employer leaving or people vacating a particular area/region, then you may have an opportunity to purchase. These are by no means an exhaustive list of reasons and probably relate more to regional areas rather than a metro city. You need to investigate further.
Although having said that, if you are looking at an outer suburb of a major city, check to see if they are doing a lot of new subdivision. That may dilute the stock and hence prices slide somewhat. The media keep telling us there is a housing shortage…..BUT, it comes down to what can people afford? Look at buying in a suburb where they cannot manufacture any new land with the near vicinity
Where are you based?
What suburbs are you looking at?Hi Michael,
Thanks for the replies, really appreciate it ! To give a bit of context, I live in melb and am thinking of purchasing a property in melb, either an apartment in the inner east (hawthorn, malvern, carnegie ) or looking for a house / villa in Ringwood (although not too sure at this stage). it would appear that fundamentals are quite strong, but looking at some areas, prices have flatten out the past 6 months, possibly due to interest rates.
Have not really thought about purchasing a place interstate / or in the country as it seems like a lot more effort.
AJ
Hi AJ
In your initial post you provide price ranges of $ 280-310 K. What's your actual budget and comfortable upper limit? I could then give you an idea.
For what it's worth, my bias will be toward high land content in Ringwood. Fundamentals are good. I assisted the purchase of two there last year for my nephew and sister in law……prices have moved significantly. To secure a potential future development site there with a 2 or 3 BR rental property you are looking at mid to high three's.
If you are wanting to spend less than 300 K maybe look at a well located apartment or villa unit/town house.
If you are looking for a cheapie that is well located with transport, shops, schools and in my opinion undervalued area, investigate house (on 650-700 sq m) in central Broadmeadows. Good amenity with flow on affect likely to kick in as Glenroy is becoming expensive. Try to find a place within 1 km or less to the train and main shopping centre. You will still get change from 250 K. Considered as an ugly duckling at preseent…………..we need to recognise that it is 15-16 km from Melbourne CBD. Good roads and plenty of jobs in surrounding more industrial areas. House on land that close to Melb city won';t stay at that price for long. Then there is always the potential of subdivision in the future and Hume council are pro-development.. Check it out for yourself.
Hope this helps
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