Five essential pre-auction day tips
After months of research, you’ve found your ideal home or business premises. What do you do next to ensure the prospective purchase is a winner?
Here’s a checklist of five essential things to do before putting up your hand at auction.
Secure your finance
If you’re serious about a property, you’ll bid more confidently if you have conditional approval for a mortgage. Speaking to a credit adviser is the perfect place to start.
A credit adviser will work with you to decide which loan suits your needs. Will you lock in a fixed interest loan or a variable one? Maybe a combination of both? Ask lots of questions so you are well informed. Also, if you’re a first home buyer, investigate the current government grants available to you.
Valuations & inspections
The property you’ve fallen in love with may look right, but you want to make sure it’s structurally sound. Buying real estate is likely to be the biggest investment you’ll ever make in your lifetime. If you discover any expensive defects during a building inspection, it could save you thousands of dollars in the long run. Both building and pest inspections should be carried out by qualified tradespeople. Similarly, it may be worth ordering a valuation upfront to ensure that your preferred lender will accept the property you have in mind as collateral for a loan. Your credit adviser can guide you through this process and help you avoid wasteful fees being accrued.
Get the contract of sale – and read the fine print
The contract of sale contains all the legal information about the property, such as the title, boundary measurements and recent building works. You’ll also find information about rates, local government building restrictions and easements (if any). A copy of the contract is usually available at open for inspections and you can request a copy from the real estate agent. Read it thoroughly before auction day. It’s also a good idea to get your conveyancer or lawyer to check it.
Set your budget
Your credit adviser or lender may have provided you with pre-approval for the amount you can borrow, but there are other costs to consider. These may include:
- Loan application fees
- Valuation fees (which can be expensive for commercial and luxury property purchases)
- Building inspection fees
- Mortgage insurance
- Government fees such as stamp duty (this differs in every state and territory so check the government websites)
- GST (which can be applicable in commercial property purchases)
- Solicitor or conveyancing fees.
For budgeting purposes, it’s a good idea to calculate your fortnightly or monthly loan repayments based on an amount two per cent above the current rate, to allow for possible rate rises.
Register with the agent
Some agents will require you to register as a bidder, or at least advise that you’re interested. A quick chat with the agent in the week preceding the auction, or on auction day, should be enough. If you’re not comfortable bidding, you could ask a friend or family member to bid for you – just make sure they know your limit.
Auctions can be intimidating, but don’t be afraid of the competition. If you’re prepared, you’ll bid with confidence.
How do I get assistance with getting approved?
The team at Naritas are experts in delivering timely guidance & finance approvals. We have over 100 lenders on our panel & a high quality team of dedicated advisers to steer you efficiently through the approval process.