Buying a home
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Going, going, gone
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After six months of scouring the property market you’ve finally found your dream home. Although it’s only a small two-bedroom bungalow, it’s clean and contemporary with egg-shell coloured walls, a claw-foot bathtub, a chandelier in the main living area and lovely lacquered floorboards. In short, it’s everything you’ve been looking for and more.
The only catch is it’s going to auction in about a month’s time and – apart from being a first-time buyer – you are a nervous, novice bidder.
So what exactly do you need to finalise in order to feel confident and competent about placing a bid on auction day?
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The Real Estate Institute of NSW says the first step is to contact your finance provider well in advance of the auction to make sure you have finance available if your bid is successful.
The REINSW also advises first-time bidders to be informed about property prices in the area you are interested in.
“Don’t rely on an unrealistically low-selling price range. It is an offence for an agent to falsely understate the estimated selling price. Agents’ price representations are required to be based on their estimate,” says the REINSW.
“Obtain a copy of the contract and get advice from your solicitor or conveyancer. Check what comes with the property [‘the inclusions’] and what you will not get, [‘the exclusions’].”
The REINSW also advises prospective bidders to consider the following tips:
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- If you are interested in the property, let the agent know. You may consider making an offer before the auction.
- If you are going to bid on a property you must arrange for professional building and pest inspections, surveys, strata searches etc to be undertaken prior to auction. Such checks can point to problems in the property that will cost money to fix. These reports will cost you money and you may not be successful at auction, so discuss the necessity for these reports with your solicitor or conveyancer.
- If you are a first-time buyer, go to as many auctions as you can so you get used to the process.
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The REINSW also suggests that you get up to speed with how to behave when making a bid. When making a bid, it’s important to keep your poker face on.
Make clear and confident bids and don’t let the excitement and adrenalin of the day get the better of you; know your price limit and stick to it.
The REINSW also warns against waiting until the last moment to bid as this may mean you will miss out. If you feel as if you will be a bundle of nerves on the big day then ask a trusted family member or friend to bid on your behalf.
And don’t forget your chequebook! If you are the successful bidder you will have to pay a deposit (usually 10 per cent) when you sign the contract following the final fall of the hammer.
Refer to the REINSW’s ‘Bidder’s Guide’ for more advice on how to bid at an auction.
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