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Buying Property at               : What You Need to Know

Auction

Purchasing a property at auction is exciting but requires thorough preparation. Properties sold “under the hammer” are unconditional, meaning the successful bidder must sign the Contract of Sale and pay the deposit on the spot. Here’s how to be auction-ready and make an informed purchase.

Considerations for Auction Purchases vs. Private Sales

Private sales often include protective clauses (like finance, pest, and building inspections), but with auctions, there are no such conditions. Auctions are increasingly popular, so understanding the process, securing finance pre-approval, and completing inspections beforehand is essential.

Before Auction Day: Key Steps to Prepare

  1. Finance Pre-Approval

    • Ensure you have a fully assessed pre-approval, which confirms your buying power once you sign a contract. Quick, automated approvals are insufficient for auction purchases.

  2. Obtain a Property Valuation

    • A private valuation, costing around $600-$800, can provide reassurance you’re paying a fair price. Note that banks don’t accept private valuations but doing this step can help you avoid overpaying.

  3. Thoroughly Inspect the Property

    • View the property during open houses or by appointment. Arrange independent pest and building inspections to uncover potential issues. While some agents may provide reports, your own inspection adds peace of mind.

  4. Review the Draft Contract of Sale

    • Seek legal advice on the contract terms and have your solicitor check for any zoning restrictions, easements, or other potential limitations.

  5. Know Your Deposit Requirements

    • Check with the agent about the deposit amount (typically 10%) and payment method required on auction day.

 

Auction Day: Making Your Move

Arrive early to review any last-minute changes to the auction terms. Position yourself where the auctioneer can see you clearly. Hold your bidder number high, set a budget in advance, and stick to it.

Post-Auction: Finalising Your Finance

If successful, the property will need a bank valuation, and you’ll need to confirm no major changes to your finances since pre-approval. Banks consider factors such as zoning, property size, location, and building condition. If any of these don’t meet the bank’s criteria, your loan application might be at risk.

Risks of an Incomplete Purchase

If you can’t complete the purchase:

  • You could lose your deposit,

  • Face legal action from the seller,

  • Cover re-auction costs, or

  • Be liable for the full purchase price regardless of financing.

 

Be Auction-Ready!

Consulting a solicitor before bidding is highly recommended to ensure you fully understand the risks. For guidance tailored to your circumstances, reach out to us for a confidential consultation and bid with confidence!

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©2024 Fortifi Finance

info@fortifinance.com.au
0419 550 734

 

Disclaimer

This website has been prepared with all due diligence and care, based on the best available information at the time of last update. Fortifi Finance holds no responsibility for any errors or omissions within. Any decisions made by other parties based on this information are solely the responsibility of those parties. Capstone Mortgage Solutions Pty Ltd ACN: 665 796 234 is an authorised credit representative 547296 of Australian Finance Group Ltd ACN 066 385 822 (AFG) Australian Credit Licence 389087.

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  • Instagram
  • Facebook
  • LinkedIn

©2024 Fortifi Finance

info@fortifinance.com.au
0419 550 734

 

Disclaimer

This website has been prepared with all due diligence and care, based on the best available information at the time of last update. Fortifi Finance holds no responsibility for any errors or omissions within. Any decisions made by other parties based on this information are solely the responsibility of those parties. Capstone Mortgage Solutions Pty Ltd ACN: 665 796 234 is an authorised credit representative 547296 of Australian Finance Group Ltd ACN 066 385 822 (AFG) Australian Credit Licence 389087.

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