October 29, 2014
Strong property prices and high demand are contributing to a significant rise in auctions across Perth, and it looks like the trend is set to continue with many Perth real estate agents reporting increasing numbers of properties being sold at auction this year.
So what should local Perth buyers be aware of before attending an auction? Here are our top 5 tips:
1. Get pre-approved for finance
It’s vital to know how much you can afford to spend BEFORE attending an auction. Auctions create a sense of urgency and competition, so it’s important to keep a cool head and stick to your budget. Your local Perth mortgage broker can assess your individual situation and get you pre-approved for finance, so you know exactly how much you can afford to spend on auction day.
2. Organise building and pest insprections prior to auction day
Unlike private treaty sales (the traditional method of buying property in Western Australia), you do not have the option to make your offer subject to special conditions at an auction. It’s recommended to carefully inspect the property and complete building and pest inspections prior to auction. For more information on the types of checks you should do on a property, view the Department of Commerce Consumer Protection Fact Sheet here:
3. Request a copy of the Contract of Sale
At auction, the contract is binding and unconditional at the fall of the hammer, therefore it is highly recommended to review the Contract and Conditions of Sale prior to auction day. You should have the document checked by a solicitor, particularly if there is anything you are unsure of.
4. Be prepared to pay a 10% deposit on the day
Should your bid be successful, you will need to pay the amount of the deposit (generally 10%) to the real estate agent at the close of the auction.
5. Choose a settlement agent / conveyancer
As a general rule, auction sales are not subject to finance. You will have 30 days to settle on the purchase of the property, so it’s a good idea to arrange your settlement agent prior to the auction. Make sure that you choose your own settlement agent who is not connected to the seller or real estate agency in any way. For recommended settlement agents, visit our Partners page by clicking on the link at the top of this page.
Get pre-approved for finance! Contact your local Perth mortgage broker today on 9277 9888, or click on the Contact Us link at the top of this page.