Would you want to purchase a property from an auction? Auctions are a preferable option for people who want to buy cheap homes. Read the excerpt below to get a better understanding of how to purchase a property from an auction.
Step 1: Find a Suitable Property
Your first task should be to find a suitable property. Some of your considerations would be the location of the property, available amenities, size, and most importantly, the auctioneer's asking price. Remember, the whole idea of buying a property at an auction is enjoying discounted prices. As such, conduct some market research to know the pricing of similar properties.
Step 2: Due Diligence
You will need a conveyancer to help you conduct due diligence on the property on sale. He or she will visit the land's registry to confirm the title name and lot number. Further, he or she will examine the type of title. For example, if the property has a company or strata title, you may be concerned about the owners' corporation or company bylaws. The conveyancer will also evaluate zoning regulations and resident association laws that may prohibit certain developments on the property.
Your conveyancer should also take you for a home visit. It is an opportunity to inspect the house and ensure it has all the features listed in the auction advert. Additionally, you may identify some minor or significant defects during the inspection. The solicitor will also examine the terms of the contract of sale. For instance, how much deposit do you need? When is the closing date? Will the auctioneers accept a house inspection? Remember, the terms must be favourable, regardless of how cheap the property could be.
Step 3: Bidding
Bidding can be exhilarating. You could end up exceeding your budget as you try to outbid other buyers. Therefore, if you are a first-time buyer, you may ask your solicitor to bid on your behalf. You must understand the rules of the auction. For example, you will be penalised for giving false bids. If bidding does not get to the seller's reserve price, the highest bidder at the end of the auction will negotiate the asking price with the seller.
Step 4: Closure
If you win, the auctioneer will require you to pay the deposit (typically 10% of the bid). After this, you will sign the contract of sale. You are required to pay the remaining amount before the closing date. You may lose your deposit if you cannot complete payments before the closing date.
Buying a property from an auction could not be any easier. Find a suitable property, conduct some due diligence, know the terms of bidding and closure.
To learn more about conveyancing, contact conveyancers in your area.Share