Season 21 of The Block may be over but the sales are not, with two homes failing to find buyers at auction. It’s a different story across the broader market though. As auction clearance rates heat up we explain how to get your auction game on.
Life may imitate art, but reality TV doesn’t always reflect reality.
The Block’s latest final episode is a case in point.
Two of the five homes failed to sell at auction. One didn’t even attract a bid.
But auction clearance rates in our capital cities are doing better.
Cotality reports auction clearance rates over the past two weeks are at about 72% – much higher than the clearance rate of 59.50% this time last year.
Notably, these high clearance rates are being achieved despite more homes being listed for sale at auction than any other time over the past 18 months
Now, auctions can be daunting because so much is uncertain – the number of bidders, the reserve price and, of course, the final selling price.
Below we’ve outlined five steps you can take to bring a bit more certainty to the auction.
1. Know your borrowing power
Having a firm idea of how much you can borrow can form the foundation of your buying plans.
Forget the online calculators that ask broad questions – and provide broad results that may not be accurate.
Contact us instead.
We’ll take the time to get to know you, your circumstances and your goals, and let you know for sure what your borrowing power looks like.
2. Set a buying budget
In the excitement of buying a home it’s easy to overlook other upfront costs – anything from stamp duty to mortgage transfer charges or loan application fees.
We can explain the upfront costs you should plan for.
This can help you set a buying budget, and reduce the risk of hidden costs that could derail your purchase.
3. Have your home loan pre-approved
Pre-approval means a lender has agreed to provide you with a home loan up to a certain limit, subject to certain conditions.
And that can be important when you’re buying at auction.
You’d either be very brave or very cashed up to consider bidding at an auction without the backing of home loan pre-approval.
The beauty of pre-approval is that it can help you set a firm upper bidding limit – and give you the confidence to bid up to that limit.
Talk to us about loan pre-approval as soon as you’re ready to start searching for your new home.
4. Get your legal rep to review the contract of sale
“It’s a standard contract” is an assumption that can easily catch buyers out.
If you’re the winning bidder at an auction, there’s no backing out. You don’t get a cooling off period.
So you need to be absolutely sure what you are agreeing to buy.
That’s why it’s important to have the sale contract reviewed by your solicitor or conveyancer before auction day rolls around.
5. Do all the normal pre-purchase checks
Don’t simply assume a property you’re interested in buying is in great condition.
Sure, a pre-purchase pest and building report, or a strata report (if you’re buying an apartment or townhouse) is another cost to wear.
However, it can be an investment that protects you from unexpected (and unwanted) future repair bills that could cost you a lot more.
Call us before auction day arrives
In today’s hot property market, sale by auction can be very attractive to sellers.
Contact us today to prepare before you put your hand up to bid.
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