3 Steps to Buying a Home at Auction
In a hot property market selling a Home by Auction becomes more popular. Here are 3 Steps for Buyers to make sure they are ready to bid!
Step 1 – Have your finance lined up.
As a Buyer you probably have a finance pre-approval from your bank which tells you how much your bank will lend you based on your income. But you will also need to have the bank approve the particular property before you bid. We recommend using a good proactive Mortgage Broker to assist you with the finance process.
If you are using a KiwiSaver Withdrawal and/or a First Home Grant you need to make sure you have either a pre-approval before bidding or enough time from the Auction date before settlement to have your applications processed. We can help you with your applications and check you will have enough time to complete these.
Step 2 – Do your due diligence.
Buying at Auction means you won’t have a conditional period, so you will need to complete all your property investigations before you bid. The Real Estate Agent will have an Auction Pack of documents ready for prospective Buyers to view. This will usually contain the property Title, a draft Auction Agreement, a LIM Report and sometimes a Rental Appraisal and Builders Report. We recommend that you send us the Auction Pack so that we can check all the documents for you and make any recommendations for further any investigations. We will also check the timing of settlement will work for you.
Step 3 – Pre-Auction offers and going to the Auction.
Once you have your funding and due diligence sorted you may decide that you just can’t wait until Auction Day and instead that you want to put in a Pre-Auction offer. The Seller may agree to your Pre-Auction offer subject to bringing the Auction forward and in that case your offer will be the opening bid. You can keep bidding at the Auction but if another Buyer bids higher than you your offer will be cancelled.
Auctions can be fast paced, high stress and super exciting. If you choose to go to the Auction and bid it is important to be practical and make sure that you understand and establish your limits before bidding to prevent getting caught up in the moment. If there is no successful bidder the Auction may be turned in and bidders may then have an opportunity to negotiate terms with the Seller.
Our experienced Team are available right up to the Auction day to help you navigate through the Auction process and we can assist you to put together your Pre-Auction offer and make sure you have all your ducks in a row before you bid at Auction.