Buying a Property at Auction

February 26, 2015
Geoff Pyers

Do your Homework

Before you buy, we suggest that you research the market, attend auctions and speak with several estate agents prior to considering an auction or private sale.  Being armed with information can potentially save you a lot of money. 

 

Pre-Approvals or Conditional Approvals

Perhaps the most important aspect of purchasing a property is to know your borrowing capacity.  At Mortgage Choice Camberwell, we can advise and assist with obtaining a pre-approval (also known as a conditional approval) prior to bidding at an auction.  The lender assesses your ability to make repayments prior to you committing to a mortgage.  Check out our How Much can I Borrow calculator.

 

Bidding at an Auction

The most important things to remember when bidding at an auction are:

  • You will be required to sign a Contract of Sale on the date of auction and usually pay a 10% deposit, unless otherwise agreed with the estate agent prior.
  • Be aware that there is no cooling off period once the Contract is signed.
  • You are unable to make any Contract subject to finance.
  • Bid with confidence.

 

Some common terms at an Auction

  • Vendor bids – in many instances, the estate agent can place a bid on behalf of the vendor to keep the auction moving - the auctioneer must make this clear.
  • On the market – the property has reached the vendors reserve and the auctioneer will make it clear that the property is will sell to the highest bidder.
  • Passed in – if the bidding does not reach the vendors reserve, in many cases the property will be passed into the highest bidder (this can be on a vendors bid).  If you are the highest bidder, the estate agent can then continue to negotiate a sale price.  Don’t forget if you purchase a property within 3 days of the auction, you are still considered to have purchased the property under auction conditions, so there will be no cooling off period.

 

After a property report for a Victorian property? 

Here at Mortgage Choice Camberwell, we have access to property reports so that you can determine the estimated sale price of a property in Victoria.  We encourage you to speak to one of our three qualified mortgage broker.  Our office hours are flexible – ranging from early morning appointments to after hour’s appointments.  Call me, Michael Wren today on 03 9813 3522 or email me michael.wren@mortgagechoice.com.au

Posted in: Property market

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