It is a buyers’ real-estate market in Melbourne at the moment with more properties likely to come onto the market after Grand Final day. Many of these will be sold at auction.
If you find a property you want to bid on at auction, there are four things we strongly recommend you should do well before auction day:
1.Get the Contract and Vendor Statement reviewed by a professional
Participating at a property auction is always a thrilling experience, but you need to do your homework before putting your hand up for a bid! Contact our conveyancing team and provide them with the Contract and Vendor Statement well before the auction, so they can review this before you bid for the property on the day.
The major benefit of having your Contract and Vendor Statement reviewed before an auction is it allows you to understand the risks you are taking on with the property, what you are legally committing to, as well as knowing how the sale will happen.
Buying under the hammer as the successful purchaser means you agree to purchasing the property whether you have read the Contract and Vendor Statement and you are agreeing to whatever is in the document, like it or not!
The contract includes terms and conditions specific to the sale and documents that disclose important information about the sale.
This might include (for example) whether the property has tenants in it for the next 12 months, whether the brand-new kitchen appliances or fancy curtains are staying in the property, or the owner is taking them or if there is an easement that might prevent you extending or putting in a swimming pool in the future.
We can provide you with advice and make recommendations necessary and even negotiate amendments on your behalf.
Our office will reply to your request for a Contract and Vendor Statement review within 24-48 hours.
It is also important to understand that the contract cannot be changed after the auction.
2.Get a pest and building report
You do not want to buy a house filled with termites, or one that has serious structural issues – just because you did not take the time or wanted to save the cost of a pest and building report. You need to know exactly what you are purchasing – and not find out after the auction, when it is too late to do anything about this.
3.Get your finances in order
Just as it is important to understand you cannot change the contract after the auction, is also important to realise that there is no cooling off period and no “subject to finance” clause when purchasing at auction in Victoria.
This means you need to have the money to be able to pay for it if you place the winning bid.
If you need to borrow money to pay for the property, we strongly recommend that you have your finance pre-approved before the auction.
Also make sure that your pre-approval is unconditional (up to a certain amount) or the terms for the pre-approval can be met shortly after auction.
Do not wait until after the auction to get this sorted – as if you cannot get a loan organised in a timely manner, you run the risk of your deposit (usually 10% of the purchase price) being forfeited to the seller.
4. Set (and do not exceed) a purchase price limit
Finally, while there is nothing more thrilling that trying to place the winning bid, do not get caught up and bid more than you can afford. Set a purchase limit and then stop bidding if it is reached.
If you think you are too emotionally invested in the property to be able to do this – get someone else to bid for you and instruct them to stop bidding at your limit, no matter what you say on the day!
Happy buying and remember our conveyancing team is here to guide you through this process and ensure your best interests are protected.