Should I buy at auction?
Deciding whether to buy a property at auction or not depends on several factors, including the type of property you want to buy, and your risk tolerance. It is particularly prevalent when buying a property at auction that finalising a purchase may not be possible in current markets such as this when lenders are adjusting their borrowing limits downward.
Here are some things to consider when considering whether to buy a property at auction:
Pros of buying at auction:
- You may be able to get a good deal, depending on the motivation of the vendor.
- The process is generally faster than buying through traditional channels.
- There is less opportunity for the seller to change their mind or accept a higher offer from someone else.
Cons of buying at auction:
- The bidding process can be competitive and stressful.
- You may not have the opportunity to conduct a thorough inspection before purchasing the property.
- You will need to have your financing in order before the auction and be prepared to
- pay a 10% non-refundable deposit on the day of the auction.
If you’re considering buying a property at auction, it’s important to do your research beforehand. Look into the property’s history and condition, and make sure you have your financing in order. It may also be a good idea to attend a few auctions as an observer to get a better sense of the process and the competition.
If you believe your finance pre-approval was at an absolute maximum, check in with us before your auction to provide some scenarios at higher interest rates. We can then tell you if your approach is comfortable or at a higher risk in the event of your interest rate rising. We can advise if you should hold off and possibly negotiate if the auction was unsuccessful.