How to get auction ready
It makes more sense today than ever before for home buyers to talk to a broker about securing their next property. Things are getting more complex every day with banks consistently changing interest rates and altering lending criteria in response to regulatory changes.
This means that what’s right for one buyer may not be right for another.
Having clear goals and finding a loan that will help you get there has never been more important and that’s exactly what we - as advisers - do every day. Our job is to empower New Zealanders to make informed choices and find the right finance option.
As we enter the autumn selling season, more properties are due to hit the market, and a lot of them will be going to auction. If you’re thinking about buying, these tips might help you prepare for auction day.
Involve an adviser early
Choosing to work with a mortgage adviser from the very beginning - even before you start going to inspect properties - arms you with knowledge.
Not only will you gain a better understanding of how the auction process works (if it’s unfamiliar to you), you’ll also know what is required of you from a financial perspective.
It might seem obvious, but you’d be surprised how many people aren’t properly pre-approved come auction day. If you’re serious about bidding - this is probably the most important step in the process.
Speaking to your adviser about getting formal pre-approval before auction day means that you are ready to put down your deposit if you are the successful bidder.
Set your limit
The auction floor can be a daunting place. As more and more people enter the bidding and the value rises, many buyers begin to feel the pressure. It’s important to set yourself a limit and stick to it so that you don’t spend beyond your means.
An adviser can help you understand your capacity - what you can comfortably afford to borrow - so that you have the confidence (and the green light) to bid up to a certain amount.
When you are pre-approved and ready to bid at auction, it is really important to get a copy of the draft Sale and Purchase agreement and ensure that your adviser, as well as your lawyer, has seen it before the auction.
There are a lot of properties where ‘DIY’ work has been carried out without permits. If this is disclosed in the Sale and Purchase agreement, it could affect the insurance on your property and banks may have an issue lending against that property.
Even if the alteration, such as an addition of a deck, seems minor, it’s still important to discuss this with your adviser prior to bidding.