How to Prepare Yourself to Buy a House at Auction?
With more and more houses being sold at auction it’s best to walk into an auction well prepared. It may prevent you from zealously over-bidding to get your dream home and land yourself in financial ‘hot water’ in the long run.
It can be a daunting process but here are some tips to move ahead and into your dream home with confidence.
Become an observer:
Get a feel for what to expect at an auction by attending a few as a silent bystander. This will give you an idea of the process, the competition and the atmosphere that could await you on the day of the auction.
Do plenty of research:
Use online sites and shortlist properties that you would consider buying. Get a free property report to find out the price range and previous sale prices in the area. Make sure you go to open houses. It’s important not to get attached to any one property as you could be setting yourself up for disappointment.
Save a decent deposit:
While many mortgage lenders will let you borrow up to 95% of the property value, saving the largest possible deposit gives you a head start. Moreover, on the day of the auction, if your bid is successful you will need to pay the deposit required immediately.
Have a budget and stick to it:
Make sure you have taken into account your financial commitments and everyday expenses before deciding how much you can afford to spend on your home loan and repay comfortably. Most importantly, agree to stick to that limit.
Get conditional approval:
Approach a home lender like Mortgage House and organise a conditional approval. This will give you a good idea of how much you can borrow and help you decide on a home loan that suits your needs. It will also show you as a serious buyer amongst onlookers and those testing the water, and allows you to make a conditional offer on a property to help secure the perfect one as soon as it comes along.
Cover yourself legally:
Ask for the contract of sale from the agent overseeing the auction beforehand. Especially the properties that are serious contenders, their contracts should be reviewed by a conveyancer in advance to make sure it’s a sound purchase.
Organise thorough inspections:
You need to be 100% certain of a decision before you begin bidding. That means you will also need to have all the usual pest, building, and council zoning inspections done before auction day.
At Mortgage House, we’re no strangers to the homeowner’s journey. It’s a long (but rewarding) one.
But don’t worry, we can help with that.
If you’re thinking of buying a home, you can contact us for advice about the best options for you when it comes to your mortgage.