Buying your first home at Auction is no doubt a daunting process and with so many properties being sold by Auction, it’s difficult to find the confidence you need to make that successful bid. Our goal is to help Kiwi First Home Buyers genuinely enjoy their purchase experience, as we have seen all too often the First Home buyer stressed out and uninformed of what to really expect throughout the Auction process.
There are many positives for buying a property through Auction: transparent negotiations, the opportunity to know your competition for the property, and when the hammer drops on your successful bid – you have the assurance the property is yours without any further negotiations. However, with such a fast process and an unconditional sale as the outcome – it is important you go in fully prepared.
Take the time to learn all you can about the property. In a standard Sale and Purchase Agreement, some additional clauses would be included to protect you from any unknown issues the property might present. An Auction Agreement will not have those clauses included, things like, allowing time for your solicitor to approve the LIM and builders report, and allowing you the time to secure your finance. It is important to carry out these tasks before Auction Day.
Register your interest with the Real Estate Consultant listing the property, they will have a lot of the documentation already prepared for you and your solicitor to review. If your solicitor should find anything on the LIM, EQC Claims/Scope of Works etc that they are not satisfied with, or if they simply require further information – you’ve got time to iron that out before committing to the purchase at Auction.
Arrange your finance thoroughly before the big day by getting a true valuation of the property. Many First Home buyers feel they have the golden ticket to bid once their ‘Approved Lending’ has come through, however they don’t realise that the lender may value the property less than what they might bid at the Auction. In this situation, the buyer would need to pay the difference between what the lender valued the property for and is therefore willing to lend and what their successful bid was, leaving the First Home Buyer with thousands to pay out of their own pocket. This can be easily avoided by arranging for a qualified valuation of the property. Once you know the true value of the property and have taken this information to your lender for approval, you will be in the best position to confidently bid and secure your Kiwi First Home.