10 Things To Request Before Going To Auction
Good friends of mine recently came across a house on realestate.com.au that they have decided to buy.
Trouble is, it’s going to Auction and the thought of placing a bid amid a sea of intimidating real estate agents, hungry buyers and possibly experienced Buyer’s Agents is enough to turn them off the whole thing completely.
LUCKY THEY KNOW SOMEONE IN THE GAME HEY?!
Sadly, this isn’t uncommon behaviour when it comes to first home buyers and properties going to Auction.
Even the THOUGHT of the process is enough to leave these buyers overwhelmed, and as a result, homeless. Well, not exactly, homeless per se, but either still at mum and dad’s or on the rental rat wheel, paying off SOMEONE ELSE’S mortgage.
Essentially, it stops them from moving forward and experiencing the dream of home ownership.
So what’s the solution to all of this?
In my opinion, buyers have three choices.
Walk away from the whole thing.
Stumble their way blindly though the process on their own.
Or hook up with an expert - a Buyer’s Agent or Auction Strategist who can help them navigate the daunting process with re-assurance.
Now let's scrap option 1 because really, this is a non-option!
NOW, IF YOU DECIDE TO GO IT ALONE, I WANT TO SHARE WITH YOU 10 THINGS TO REQUEST FROM THE SELLING AGENT IN PREPARATION FOR THE AUCTION.
Here’s a basic list of the things I ask the agent to provide following my first inspection, especially if I’m seriously considering turning up and bidding on Auction day.
... AND IT GOES A LITTLE SOMETHING LIKE THIS...
“Thanks for your time meeting me at the property today Fred.
Would you please forward the following to me at your earliest convenience.
- A copy of the proposed Contract of Sale and associated documents.
- A copy of the current Title Search.
- Current rates and water notices.
- Copies of current Tenancy Agreements.
- Copy of a recent Building and Pest Inspection Report.
- Evidence the property is not subject to Flood.
- Examples of comparative sales in the area.
- Authority to Bid on Behalf of A Third Party. (this is because I’ll be bidding on behalf of my client.)
- Bidder’s Registration Authority.
- Any other documents you feel are relevant to the sale.
In addition, would you please confirm the proposed settlement period and deposit required if we are successful at the Auction.
Please tell me if there is anything else I should know about this property that may affect my decision to buy it.
For example, has there ever been a death at the property or a significant event such as a burglary etc?
This last question is a MUST, but is often forgotten by novice buyers.
Agents are obliged to disclose to you if they are aware of any significant events that have taken place at the property that may affect a buyer’s decision to purchase.
If you’re anything like me, I kinda like to know what’s gone down at the property and its past history before I make my decision to buy!
THIS LIST IS A GOOD START FROM WHICH YOU CAN BEGIN YOUR DUE DILIGENCE AND MAKE A GO OR NO-GO DECISION ON THE PROPERTY.
One last thing - don’t tell the agent what you think the property is worth.
Remember, you’ve only just seen it, so how can you REALLY know it’s value without doing your homework (your due diligence).
Even if you do have an idea about what you might pay, keep this to yourself for now, and if you feel obliged to disclose a price, give a price range of your finance pre-approval instead of firm figures that relate to this property specifically.
Just say you've been pre-approved for a range of between X and Y. Once you tell them this, the agent will often indicate whether you're in the ball-park for this property. If they don't, ask.
This is a good start but if you want to learn more about the Auction process, download my book - Your Step By Step Guide To Buying At Auction.
You'll learn about the entire process if you read this cover to cover.
Happy house hunting!