What you need to know from a finance perspective
Vendors can choose to sell at auction for a number of reasons. Generally if they're unsure of the market value of if there is high demand and they want to make sure they get the best price, from a number of interested parties.
Now buying at auction has some different finance requirements compared to the normal process of making an offer and negotiating to and fro. I've outlined what these are and how you can prepare for them below.
Unconditional - The biggest thing to be mindful of when buying at auction is that you are buying unconditionally. This means that you need your finance approved and all other conditions completed before you bid at auction.
We can arrange for your finance approval to be unconditional and specific to the property you are purchasing before the auction, we can also help with setting the maximum figure that you can bid to. Along with this you'll need to complete checks for Building Inspection, LIM report etc before auction day.
Deposit - If you are the successful bidder at auction you will be required to pay a deposit on the day. This is generally 10% but can vary. As a part of your finance approval we can ensure you have the 10% deposit available to pay on auction day. Sometimes you may not have this on hand so we can arrange for a temporary advance from the bank to pay the deposit.
Settlement Date - The settlement date for a property purchased at auction is generally set before the auction. You need to make sure you are ready to settle on that day and that all arrangements are made to do so. We will ensure loan documents are sent to your solicitor in time for the settlement date.
Registered Valuation - Many borrowers will require a Registered Valuation when buying at auction. This can be because they have a low deposit and require this for the purchase. Or because they have another property which is required to give enough equity to purchase at auction. We will let you know exactly what is required for your personal situation well before the auction so that you have time to prepare.
In addition to the above major differences with auctions other things can come up. As always, preparation is key and we can guide you through the entire process. If you think one of these things might be an issue then just get in touch and we'll work through it for you to get the right result.
As for buying at Mortgagee Auctions... Well that has all of the above things to bear in mind plus a bunch of other issues that may crop up. Get in touch if you'd like to discuss that further.
As always, if you have any questions, please feel free to get in touch
Matamata, Te Awamutu, Cambridge, Hamilton, Auckland