Property auctions are generally a tense affair, especially if you are one of the bidders. There are various potential risks in an auction for the uninformed buyer. The auction contract will be unconditional. Once the hammer has gone down on your bid, you will not get another opportunity to inspect the house and withdraw your bid otherwise you will face a ramp of lawsuits.
Before you head out to an auction for a particular building or buildings, take the time to visit the property and do a comprehensive building and pest inspection. This is also a risky strategy because you are not guaranteed of a win in the auction but it is a good insurance against a potentially dud property purchase.
Buying properties through auctions can be costly affair if you do not have a well-tuned strategy on assessing the condition and value of properties before heading out to auctions. Without good information and insight into the property, you will probably end up paying too much for it. Buying a dud in an auction may unlock a Pandora’s Box of problems that may end up keeping you out of pocket for many years. If you are buying it as an investment property and you are overpaying for it, you are most likely going to lose money over the long run.
Your best insurance from bad investment decisions during property auctions is a building inspection report. The risk of ordering a building inspection report without a guarantee that you will actually win the auction is relatively small compared to the risk of overpaying for a property by tens of thousands of dollars. A property inspection will unveil lots of issues with the building that can help you come up with a reasonable offer for the property. You want to go to an auction with the assurance that you are paying a fair price for the property. Without an inspection, your investment will be bedeviled with lots of doubts.
Pre-Purchase Property Inspections
Make sure you carry out a professional inspection before the auction day. If you are a frequent bidder, you can have a dedicated property inspections melbourne service to cut down on the costs. Inspections will give you the peace of mind that all the inclusions in the auction are in order. If something is broken or not functioning properly, it will be easier for you to calculate a maximum price that you can pay for the property.
Review the Contract of Sale
While pre-purchase building inspection is critical, do not go into an auction without reviewing the contract of sale with the help of a qualified lawyer. A professional lawyer will advise you on the various potential legal risks and advise you on how best to protect your interests during the property purchase. Risks during auctions mainly concern the settlement periods, deposits as well as any obscure terms and conditions in the contract of sale. Through property inspections and professional legal advice on the terms of sale, you will be sure that you are purchasing is in its intended condition.