Building Inspections when Buying at Auction
The key to buying at auction with confidence is to do your homework well before the auction day. The laws and conventions that surround the auction process can land the buyer in a difficult situation when things go wrong and can prove to be very expensive. In simple terms, if you are the highest bidder at an auction after the reserve has been met and the property is ‘On the Market’, you are committed to go through with the purchase regardless of further information that may come to your attention after the event. This means that if you later become aware of significant problems with the property, you are still obligated to buy it regardless!
Some agent/sellers have a Building and Pest Inspection undertaken prior to the auction which is made available to registered bidders. If conducted by a licenced building inspector this is likely to be an unbiased report that you can rely on, however make sure it’s not a “sales document” that is gilding the lily a little.. If an independent Building Inspection report is not available, it is strongly recommended that you go to the expense of having a Building and Pest Inspection done for yourself prior to the auction. If you don’t wish to go to this expense, you will need to accept the risk that there may be defects in the home you have bought that may require significant expenditure to rectify.
Before you attend the auction ensure that the money you will need to pay for the property is readily available and that you will not be placed in a situation where the funds are not available when required as this will not excuse you from completing the purchase and you may be liable for the full amount. Secondly, make sure you have a good idea of the condition of the property, any encumbrances such as easements over the property and what is a reasonable price that you are prepared to pay.