Buying a house at an auction

24th July, 2010

I was returning from my recent annual winter leave (the holiday was great thanks!) and decided whilst sitting on the plane to put my intentions into action and write more articles for this website you’re reading right now.

 

So when brainstorming about ideas to write about (and believe me there are many that come to mind relating to real estate in Tauranga!) I naturally thought to kick things off, I could write about auctions, in particular, buying at auction and what you as a buyer need to know and do to make sure you are ready.

 

A lot of buyers don’t like to buy properties at auction, mainly because of a lack of understanding and education, however I find that those buyers, once they know what they are doing, that do bid and buy at auction can find the process isn’t nearly as scary as they think.

 

The main premise for a buyer considering buying at an auction should be: “What have I got to lose?”, if you bid to a price that you think is appropriate and the vendors accept your offer, you’ve purchased (Great!) If the bidding goes beyond where you thought it should, you haven’t purchased anything and you haven’t lost anything!

 

So find below a few tips that will help in your preparation for on the day:

Do your homework. Get building advice from an inspector, visit the property file at the local council and ensure your solicitor has a copy of the conditions of sale (the agent should provide this for you) to view prior to the auction day. NB: Often a vendor will have a LIM report and a building report available for interested buyers.

Get your finances sorted! See a mortgage broker to ensure you have pre approved finance. If you are the successful bidder you will require a ten percent deposit (unless you have arranged otherwise prior) and you will be bound to complete the sale on the settlement date.

 

Most real estate offices have auctions run most weeks so there can be plenty of opportunity for you to visit an auction prior to the big day to see how they are carried out and to get a feel for the environment.

 

If you have any queries or if you have experiences of auctions you would like to share please don’t hesitate to contact me on rodney@rodneyfong.co.nz.

 

Disclaimer: Please note that the above article is based solely on the personal opinion of the writer and is not deemed to be a reflection of any views held by either Realty Link Tauranga Limited and LJ Hooker. All buyers and sellers should seek independant legal advice on any matter regarding the sale and purchase of real estate.