There has been a surge in properties marketed for sale by auction during the current property boom in Newcastle. Auction is attractive for sellers as it allows them to go to market without setting a price cap on the property.
For the purchaser it can be a stressful process. There is no cooling off period and it can often be competitive with dozens of other prospective buyers. The environment is charged with excitement, anticipation and often a little nervous energy. However, with the right preparation, you can go to auction day confident that you’ve done all the right things in the lead up.
1. Have Your Contract Reviewed By A Conveyancer Or Solicitor Prior To Auction
It is recommended to seek legal advice regarding the contract. If you are successful at auction any contract amendments cannot be made unless they are agreed prior to the auction.
2. Negotiate Contract Conditions Prior To Auction
Vendors will usually agree to amendments prior to auction as they want to keep most buyers involved and bidding the price up at the auction.
We are often able to negotiate changes to the settlement date, deposit terms, and contract conditions prior to auction on a buyer’s behalf.
Request A Longer Settlement
Some buyers will also request a longer settlement date if they need to sell a property or need additional time to arrange finance.
A five per cent deposit is often requested, as if you are successful on the day the deposit needs to be paid at the auction. Check with the agent how they will accept payment of the deposit on the day, as you may need to increase your daily funds transfer limit if paying by electronic transfer on the day.
3. Seek Finance Pre-Approval
You should seek finance pre-approval and ask the bank whether they will value the property at your maximum bid price. It is difficult to obtain unconditional loan approval prior to auction, but your lender may be able to do a desktop valuation and confirm the maximum amount they will lend you against the property.
4. Do Your Research
The nerves and excitement can often get the best of you at auction. Do your research to know what you’re buying.
Research interest rates and where they are headed – up or down? Look at recent sales in the area. Build a solid picture of what the house is worth and what you are prepared to pay.
You should also undertake building and pest inspections prior to auction, or if the vendor has these available, check that they can be transferred into your name following the auction. This will protect you in the event of major defects that are not disclosed by the inspector in the reports.
5. Choose Conveyancing Professionals That Use PEXA
Our conveyancing team conduct all our settlements electronically using PEXA, which means that clients receive funds from their sale on the same day and properties are transferred into our clients’ names immediately at settlement.
We also give clients the option to follow their settlement electronically using the PEXA Key app, which they can download on their phone and use to receive updates on the progress of their matter.
For peace of mind before buying at auction, we have a team of conveyancers, conveyancing solicitors and paralegals who are here to help. We can review your auction contracts and negotiate terms on your behalf prior to auction. Get in touch today.