The chance to market and sell a home within a set timeframe, while making sure full market value is achieved, has led to auctions becoming a popular way of buying real estate. However, if you're an auction newbie, the whole process can seem a little scary at first glance.
One of the best ways to ensure a successful auction purchase is to prepare well in advance and perform as much research as you can. Then you can be sure you will enter the market with the confidence you need.
Sort out your finances early
The first step when purchasing real estate by auction is to get your finances in order as soon as possible. Get in touch with a mortgage broker or lender to determine how much you can borrow.
This will give you an idea of your budget and what sort of price range you should be looking for.
You can also get your home loan pre-approved, which is definitely useful once auction day rolls around. Pre-approved finance can last for a few months, so this should be sufficient time to look for a home.
Set a bidding limit
Once you have your budget in mind, you can set your bidding limit. It's crucial to stick to this figure on auction day to prevent spending more than you can afford. Remember to leave some space to accommodate any last-minute bids, but know your absolutely final limit.
Select a strategy
Before the auction starts, it's best to determine a bidding strategy. Some buyers prefer to bid straight off the bat as soon as the auction starts, while others wait until the last few minutes as things begin to really heat up.
A few buyers may jump in with a large bid to knock others out of the water, or some people might up the ante with a series of small increments.
Whichever strategy you decide to adopt, make sure you keep your budget in mind and your feelings at bay!
Open house inspections can be equal parts fun, exciting and nerve-wracking, especially if you find yourself falling in love with a property at first sight.
However, there will be plenty of time to dote on your home in the future - inspections are all about keeping your eyes open for any signs that your potential new abode might be a major lemon.
Homes may not have voices, but that won't stop them from trying to tell you something. Here are some of the more serious open inspection red flags to be on the lookout for.
A shaky foundation
It's often said that a strong foundation is the most important part of whatever's built atop it, and this can hold true for houses. While costs can vary, cracked foundations are notoriously difficult to fix and can cost homeowners tens of thousands of dollars.
Keep an eye out for cracks on steps and walkways outside. Small cracks may be normal and come with age, but wide, horizontal cracks may be a dead giveaway that the home is falling apart underneath.
Nothing quite compares to the risks associated with water damage. Not only can moisture rot building materials, it can lead to the growth of mould and mildew. In turn, this can lead to serious respiratory problems for people with allergies.
Signs of potential water damage include dank, musty smells, water stains, mould spots and warped walls. While water damage itself can be fixed, even more important is what caused it. After all, a leaky pipe will be much easier to fix than a hole in your roof.
Not only can vermin and insects make your skin crawl, they can also be terribly difficult to get rid of. The damage caused by pests like mice and wood borers can be far-reaching, and the costs associated with eliminating them aren't cheap.
During an inspection, take time to look around for signs of pest problems. These include dead bugs, animal droppings and mouse holes.
You can be certain you’re properly prepared when you’ve covered these bases:
You’ve saved your deposit, consulted a mortgage broker or financial planner and made sure you can afford the monthly repayments on your proposed property loan
You’ve prepared yourself mentally, meaning you’re prepared to move on from being a renter and sacrifice the flexibility, or you’re ready to invest in property and accept the responsibilities and concerns of becoming a landlord
You’ve properly considered where you can afford to buy and the standard of property your budget will stretch to
You’ve done the footwork in the suburb/s you want to buy in and feel confident you understand fair property values
You’ve considered whether it would be wise to obtain income protection insurance, in the context of your personal and family obligations
You’re happy that the real estate market conditions are right for you and that you’re not buying because you feel compelled by others
You’ve considered renting versus buying and weighed the benefits and downsides carefully
You’ve received legal advice (or at least had a Conveyancer inspect the contract of sale) and you’ve carried out a building and pest inspection that is to your satisfaction
You’re prepared to accept your obligations as a good neighbour i.e. contribute your share to maintenance in a strata plan or share costs of replacing fences and pruning gardens with houses
Renovating real estate is a great way to add value, improve salability, or increase your rental return. However, your neighbours will likely be less than thrilled with the noise and disruption your renovations will cause other residents in your strata plan.
First National recommends the following course of action:
Inform the Owners Corporation, residents and immediate neighbours of the date you will start renovating and when you anticipate finishing
Comply with council and building rules and guidelines around safety, noise and rubbish removal i.e. what hours and days of the week are works permitted?
Be considerate but don’t pander to unreasonable resident demands
Make sure your tradesmen don’t obstruct driveways or hallways while working
Make sure lifts are properly cloaked with protective curtains
Assure that tradesmen clean up at the end of each day so residents are not adversely affected
Homeowners and tenants should take the following steps to reduce their bushfire risk:
· Clear leaves from gutters, downpipes and roofs
· Check roof vents and screen them with fine wire mesh
· Check that pressure relief valves on LPG cylinders face away from your home
· Cut back overhanging trees, mow grass, rake up flammable leaves
· Don’t dump green waste behind your property, on council reserves or in bushland
· Check garden hoses are long enough to reach perimeter fences
· Consider buying a portable, petrol driven pump to use from your pool or fire tank
· Download the ‘Disaster Watch’ App and any available local fire service Apps
For families considering holidaying away from home during summer, First National Real Estate recommends letting a neighbour know where you’ll be and how to contact you.
Take extra steps like turning off and disconnecting non-essential appliances, close all internal doors, test smoke alarms, and, if you live in a bushfire prone area, check with your local fire brigade for any fact sheets or checklists they may have available.
Taking these simple steps now can make a lifesaving difference in protecting your home, and family from a fire.