How to prepare to buy a property at an auction.

Meighan Hetherington, director of Property Pursuit Buyers’ Agents and Advisors, said the most important thing was to be prepared and confident when it came to bidding at an auction.

Here are her tips for preparing to buy a property at auction:

1 . Determine what the property is worth

In some states, like Queensland, it is illegal for an agent to give an indication of price or reserve.

To work out what a property is worth, buyers’ agencies like Property Pursuit conduct comparable market analysis.

“You can determine what a property is worth by looking at the sale price of comparable properties that have sold in the past 6 months,” Mrs Hetherington said.

“This information will help you to set your limit”.

2. Do your research

— Ask for a flood report

— Check the zoning of the property and surrounding properties

— Check if any major developments are coming up in the immediate area

3. Engage a licensed building and pest inspector

Mrs Hetherington believes this is a vital step.

“No structure is going to be perfect, but if you are armed with information about how much money you may need to spend then you can take this into account when setting your bidding limit,” she said. “Or you may simply have to walk away from the property all together if there are significant issues that cannot be overcome.

4. Speak to your bank — they may conduct a pre-purchase valuation

Some banks will only provide you with conditional approval, subject to valuation, but auctions are an unconditional purchase so if you are bidding on this basis then you need to be very certain about the value of the property, according to Mrs Hetherington.

“Very few banks will do a pre-purchase valuation which will cost you money, or you can engage a valuer yourself,” she said.

“Check with your bank to make sure that they will accept an independent valuation if you are the successful purchaser”.

5. Speak to your solicitor to review the contract and conduct searches

If you have not employed a buyers’ agent to prepare for and bid at the auction on your behalf, then Mrs Hetherington says your solicitor is your only reliable source of independent advice.

“You will need to have a solicitor review the contract, do all of the conveyancing searches, flood reports and all of the other relevant searches so that you are fully informed about all matters affecting the property”.

6. Set your price limit

This will be based on two factors:

— Financial capacity (how much the bank will lend you and also how much you are actually comfortable paying each month)

— What the property is worth (look at comparable sales within the past 6 months)

7. Crash a few auctions

Mrs Hetherington recommends buyers attend a few auctions in their preferred location to see how they work.

“This will make you more comfortable when it comes time to bid for your dream home or investment property”.

Sourcefrom:https://www.realestate.com.au/news/buying-at-auction-here-are-7-ways-to-prepare-and-have-no-regrets/