Most properties are sold one of two ways, by private sale which is where a buyer looks at a property and negotiates a price with the seller or the seller’s agent, or by auction where buyers bid for a property on a specified day. Buying a property at auction, particularly a strata property, is a slightly different process from buying through a private sale. If you are purchasing a strata property at auction, it’s important to understand what you need to do before sale day arrives.
Buying a strata property at auction
If you are purchasing a strata property by auction you will need to ensure that you have all the paperwork ready by the auction date. As there is usually no cooling off period after a property is sold at auction, you need to ensure that you are completely sure about the property and have everything in place, including finance, so that if you are the winning bidder you can go ahead with the purchase.
Do I still need a pre-purchase inspection if I’m buying at auction?
Ideally, you should get a pre-purchase property inspection for any property you want to buy, whether the sale is private or by auction. Although a property may look like it is in perfect condition, some damage is not visible without a professional inspection. This can include structural issues and pest damage as well as other problems. It’s important to arrange and review building inspections before you buy a property by auction so that you can avoid making an expensive mistake.
When you buy any property by auction you need to arrange for any pre-purchase inspections before the auction date. If a problem is identified after the auction, you may not be able to change your mind. We recommend a building inspection, and in some situations a pest inspection. In the case of a strata property, you will also need a strata inspection. Review each report thoroughly for any signs of potential issues.
What is a strata inspection?
Strata inspections look at the financial state of the body corporate and whether the building is compliant with local fire and safety regulations. A strata inspection can tell you if there are any expensive repairs planned, and if there have been any known disputes between neighbours or between residents and the body corporate. It can also give you an idea of whether there is enough money in the sinking fund to pay for upcoming repairs and maintenance or whether you are likely to face significant costs or ‘special levies’ in the near future.
But inspections are so expensive!
It can be frustrating to purchase property inspections for auction properties only to miss out on the property on auction day. If you are looking at multiple auction properties, the costs can increase before you have even bought your property. One way to recover some of your costs is to re-sell your reports through Compare Inspections. When you buy your report, you can allow it to be resold on the site and get money back whenever someone else buys it.
If you want to save money on reports for properties you are interested in you can also check online and see whether a report already exists. You can then purchase it for a reduced price.
When you are buying a property by auction, it’s important that you arrange and check all the documentation before the auction date. Once you have committed to purchasing a property by auction you may not be able to change your mind, even if a later inspection reveals a major problem with the property.
At Compare Inspections we can make it easier to arrange inspections and keep your costs down. Arrange a new inspection, purchase an existing report or re-sell your inspection reports to save money and ensure that you have all the information you need to make an informed purchasing decision.
By Darel McBride
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