Purchasing before auction.... What to do?

This week I was asked by a client how to purchase a property prior to auction.

The answer to this is that it all comes down to the vendor, the person who owns the home and whether or not they are willing to accept an offer prior to the auction. The tricky part of course, is how you can secure your finances so you can still purchase the home with confidence.

Typically, when you purchase a home at auction, or prior to, the offer needs to be a cash offer. Meaning no conditions at all and once agreed, you sign the contract with no cooling off period.

Now you cannot always purchase prior to the auction with a finance approval, but there are ways to lock in the home before it goes to auction and for this to happen, a few things need to be in place;

  • Time. There needs to be at least 2 weeks or more before the auction date to give yourself enough time to value the home
  • Vendor has at least verbally accepted the offer. There needs to be a written offer on the contract with an agreed price. Now the offer does not need to be signed by either party however this will assist with a valuation order
  • You need to be working with an experienced broker or banker who can gather all the information, order the valuations upfront and have it all formally approved prior to the auction, and done in the quickest time possible so that the vendor does not change their mind about taking the home to auction (because they can if it is not signed) and risk losing the purchase.

If you are going to auction and do not have at least a fully assessed pre-approval in place then feel free to drop me a line or send an email to me at lee.banh@loanmarket.com.au

Happy house hunting!

Lee