What I need to do in an Auction?

Viewing 5 posts - 1 through 5 (of 5 total)

amsjerm
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@amsjerm
Join Date: 2007
Post Count: 9
May 19, 2008 - 3:13 pm
Hi All,
I'm eyeing a property thats up for an auction.
Normally when you buy, you offer a price and its accepted and the deal goes ahead subject to finance and building inspection. Then the legal stuff happens.
To me, with an auction, you pretty much have to buy on the spot and everything is set.
Now I know I should do due diligence, inspect the property, have a look at the contract. I'm thinking buildign inspection and having a solicitor looking at the contract, won't that cost a fair bit of money. You would be spending that money even if you don't win the bid.
What should I do in an auction?
crj
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@crj
Join Date: 2004
Post Count: 618
May 19, 2008 - 8:44 pm
That's right. That is a substantial problem with auctions from a buyer's perspective.
Scott No Mates
Participant
@scott-no-mates
Join Date: 2005
Post Count: 3,856
May 20, 2008 - 10:13 am
Your solitor won't charge to review the contract, it is a matter of good will. As for the building inspection, it is your insurance about the place you are buying – you then become very choosy as to which properties to have a paid inspection on.
amsjerm
Participant
@amsjerm
Join Date: 2007
Post Count: 9
May 27, 2008 - 1:08 am
Thanks for the advice. I have got a solicitor to have a look at the contract, and will organise an inspection.
Another thing, after a bid, the buyer needs to pay a deposit. My question is, does the buyer have to give the full 5 or 10% deposit straight away, coz I don't have a cheuque. I have the funds in my bank account and I don't want to carry cash like that.
How does deposit payment work after the auction, do they allow a few days for the full deposit?
Richard Taylor
Participant
@qlds007
Join Date: 2003
Post Count: 12,024
May 27, 2008 - 4:52 am
As the agent what deposit terms the vendor are accepting.
Often you will be required to present a deposit cheque (personal cheque is normally accpetable) on signing which is usually at a weekend.
Other thing to do is make sure your mortgage broker or financier has organised a valuation on the property prior to you bidding.
Remember the financier will lender against purchase price or valuation whichever is the lower.
Just because you have bought a property which has a valuation higher than the contract price you will only be able to borrow against the PP. Conversely if the purchase price was higher than the Bank value it at then you will only be able to borrow against the lower valuation.
Richard Taylor | Australia's leading private lender