In an upswinging market more and more properties seem to go to auction, so more than ever you need to have all your ducks in a row and be ready to put your best bid forward either at auction or beforehand. Regardless of the market conditions it always pays to be purchase-ready so here are our top tips at purchasing at auction, knowing your options, and how to be prepared – so you are ready to roll when auction day arrives.
- Be auction-ready
As much fun as buying a house is, there is a lot of paperwork involved – that is just a part of life – so you need to have your paperwork ready. If you don’t like paperwork that’s fine, that’s why you work with amazing lawyers, accountants and mortgage brokers who can take you through the process and you can rely on their experience.
At a minimum, you want to have the following documents ready to go before you start shopping around for home loans:
- Your two most recent payslips, plus your most recent Group Certificates
- Driver’s licence and passport
- Most recent monthly bank statements for the account into which your salary is paid
- Statements for the last three months for the account in which you have your deposit
- Ask lots of questions
We can’t all be good at everything. If you are getting frustrated and don’t understand all the property lingo and terms, that’s completely fine — but make sure you are working with people who are experts in the area and can help you through. Not only that, make sure you ask them lots of questions so you can learn from their experience.
It is important to rest on the experience of friends, family and experts who have been through the same process. Ask people you trust who they used to help them with finance, legal services and accounting, and talk to those people.
- Know why you’re buying and what your strategy is
What is your plan for the property? You’ve got to remember that although this might be your home, you are spending a large sum of money so you need to think about what your goals and strategy are for the property. Are you buying to live in, or to invest? How long are you planning on holding the property? Do you need to spend money to renovate, and if you do, how much?
It pays to stop and think about why you’re buying the property, and what your goals and strategy are, because this will ultimately determine the type of loan you will get, how much you will spend on the property on improvements, and how much you will spend on the initial purchase.
- Do your research
Where are you buying? What is the area like? If you want to rent the property out who are the likely renters? How much could you get per week in rental income? Is the area well serviced by public transport? What shops and amenities are nearby? Is it far from the airport? Or maybe it is too close to the airport, or a highway – as in the film The Castle – and affected by noise pollution.
There are loads of free resources to help with giving you information on the property you are looking to purchase, its suburb and surrounding amenities. These include:
- Walk Score: Great for breaking down the places nearby, commute details and features of a neighbourhood https://www.walkscore.com/
- Realestate: https://property.value.realestate.com.au/
- Domain: http://www.domain.com.au/property-profile
- Onthehouse: http://www.onthehouse.com.au/
- Bank valuations
- RP Data
5. Engage your experts
As I said in the points above, you can’t be expected to know everything about everything. Ask your friends and family who they have used before when moving house and then chat to those people. Most importantly, make sure you can work with them.