The number of properties being sold at auction is on the rise, with many Australians buying their homes and investment properties this way. This is supported by the latest figures from CoreLogic RP Data, which show 85,108 properties have gone under the hammer so far this year, an increase of 21.7% when compared to last year.
While there are many bargains to be found when buying at auction, it’s important to do your homework first, and be prepared before you register and make that first bid. It can be all too easy to get caught up in the thrill and excitement of an auction, and you may find the pressure gets to you and your emotions begin to take over. Some property owners may even be open to an offer before auction and, in some instances, it can be a good idea to pursue this avenue and avoid going to auction all together.
If the property you are purchasing does go to auction, it’s important to be aware of the following – especially if you are the successful bidder!
- You will be asked to sign a contract confirming that you are the winning bidder and that you are purchasing the property for the auction amount.
- You will be offered the contract which was already in place prior to the sale, and will be unable to alter the conditions and terms of this contract.
- There is no cooling off period.
Because of this, it’s vital you do your homework prior to auction day.
Know the value of the property
Taking the time to do some research prior to an auction will ensure you pay a fair price for the property. Research recent sales in the area, paying particular attention to the prices of comparable properties. Talk to other agents or industry experts to get a true appreciation of what the property market is really like in the area you are purchasing in. Then once you’ve done your research, set your price limit and stick to it!
Check your paperwork is in order
Prior to the auction, arrange for your solicitor to review the sales contract and all associated documents to check there are no issues. Confirm with your lender that your finance is all in order and you have access to funds to pay a deposit on auction day if you are the winning bidder.
Inspect the property
If you can, try to inspect the property a few times – including just before the auction. If the property has undergone any renovations or extensions, it’s vital you check the appropriate planning and building permits have been obtained from the local council. If they haven’t, you will be responsible for any issues which may arise in the future.
When inspecting a property you are considering purchasing, pay particular attention to the following areas:
• Roof
If there are any signs of the roof sagging or there are broken or cracked tiles or lifting roofing panels, you may be up for substantial costs to repair or replace. Depending on how long the roof has been damaged and the extent of the damage, further problems inside the home may also exist.
• Floors
Are the floors on a slope, cracking or have a spring to them? These are all signs the property’s stumps may be damaged and will possibly require repair or replacement.
• Walls
Check the walls both inside and out. Cracked or ‘crazed’ brickwork can indicate significant structural issues. Some small cracks in the walls can be harmless, however larger cracks can be a sign of significant structural problems. Bubbles or blistering paintwork can indicate pest activity, and the last thing you want to discover after purchasing a property is termites. Are there signs of dampness, mould, peeling paint, or lifting tiles? All of these can be signs of rising damp issues.
Leave it to the professionals
While it’s important to inspect the property yourself, it’s also essential to engage an experienced and professional building and pest inspector to complete a report on the property prior to purchase. Issues which may not be evident to you will be identified during professional property inspections. Melbourne, Sydney, Geelong and the Central Coast are just some of the areas serviced by the experienced team at Compare Inspections.
With a little homework, preparation and expert advice prior to the auction, you can protect yourself against any potential problems, and instead focus on enjoying your new property purchase.
By Darel McBride
Follow Darel on:
