Your first foray into the property market will be akin to Alice’s venture through wonderland! There will be no shortage of obstacles and distractions, and fortunately for you as the reader of this blog you will hold an invaluable tool that will protect you and guide you through the daunting maze of buying real estate.
Now that you have set your sights on your dream home, the adventure begins! Strap yourself in, it’s time to jump down the rabbit hole!
How to win at auctions
Lesson 1 (and perhaps the most important lesson of all) is to know what you are buying. Be sure to thoroughly inspect the property. Caveat emptor (buyer beware)! As purchaser, you are expected to be aware of the physical defects in the property, whether obvious or hidden.This may require obtaining pest and building reports, strata reports and the like, before you bid at auction.
Lesson 2, how will you pay for it? If you are borrowing money, you must ensure that you have written loan approval before you begin bidding! Don’t put the cart before the horse or you may find yourself locked into a commitment you can’t afford.
Lesson 3, ask a lawyer to review your contract before the auction. If you are the successful bidder at auction, you are bound by the contract – there is no cooling off period. Good legal advice is great value when buying property.
Lesson 4, be aware of any last minute changes to the contract. These will usually be announced when the property is introduced.
Lesson 5, ask your accountant about the tax implications of your purchase. Should you purchase it in your own name as an individual? Or does purchasing through a business entity, such as a company or a trust, provide you with a financial advantage?
Lesson 6, know what the property is really worth. Do some research, and find out the sales details of similar properties in the area. Use an objective value of the property to guide your budget.
Lesson 7, have a game plan for auction day. Use the research you have already done and decide at what point you will begin bidding and more importantly, when you will stop. Don’t be too invested in chasing your dream. Emotions get in the way of strategic and efficient buying. There will be other homes on the market if this one escapes you.
Lesson 8, have your eyes on the prize and your ears one the auctioneer’s voice. Know when the reserve price has been reached, because from then on the property will go to the highest bidder. The reserve price is the lowest price the vendor will accept. This will be known by all at the auction, but your highest price is your secret! Reveal it to nobody, and you might just walk away saving thousands.
Overall, the simple might seem daunting, and the obvious hidden, but it’s your job to sort the illusions from reality and ensure that you are purchasing what you bargained for. If you’ve read to the end of this article then you are ready. Good luck and be weary!