Buying at Auction

I'm not sure if you are reading too much into it or not.....but why would you consider bidding on something that is higher than someone would offer? I buy at auction more times than I buy at private treaty. I love, love, love auctions. Especially when I'm the only one bidding. I don't go to auctions to buy at a high price.

 

Thank you for the list of questions you posted @Shahin_Afarin that's very helpful, will definitely ask my broker.

Her answers were this "It would be easier to lower the loan amount. For a higher loan amount, the application need to re-assessed. " when I asked her about what's the purpose of of putting the "highest" price on the contract? What are the consequences when the final auction price goes (1) higher or (2) lower than the price we put on the contract

 

I see - did you go through something similar to get the formal loan approval on the property (mortgage broker asked you to put a highest purchase price on the copy of contract before Auction so that she can get a bank to assess your loan application?)

Any tips to share in securing your properties at Auction?
Why you love Auctions?

 

What the broker has stated is correct but you haven't asked her the "right" question.

The "right" question is why do you need an executed COS before the auction?

 

What's "COS" stand for? My apology for my ignorance.

 

It is not about trusting or not. Will you let others know your highest purchase price before Auction, put it down on the copy of the contract on the property that you are interested and you plan to go to Auction to bid that property?

 

@Shahin_Afarin
Pre-approval is with AMP.

 

@Shahin_Afarin Confirmed with the broker, the pre-approval is not system approved and assessed by a credit person. Thus, can rule out your second reason so I still cant get it, the reasons/purpose of getting a formal loan and full valuations done before auction. Also I just realised that the pre-approval has a min. purchase price condition which I am asking why. I have been telling her that I would like to purchase approx. $400K (for example) for a property but there's a min. purchase price condition (e.g. $420K) on the pre-approval which I never request such amount from her.

 

I love auctions when no one bids and it gets passed in

 

Its all so overly complicated.

Just tell your broker you want to get preapproved to the highest amount you can. That's it. Then you know what you have to bid with and if you decide to buy over what you have finance for then you pay the extra. Obviously what you decide to pay for the property should be inline with your DD and predetermined max amount, and not pay more money just because you may have the finance for it,


I would suggest though to read up on Auction Strategy. Being prepared and understanding how the process works, the tricks, the traps and all the BS that goes along with it and then having a solid strategy in mind - can make all the difference to you,

 

Nope! I've only used the big 4, and paid cash for the last one.

Because I only buy when nobody else is buying....and I love bargains.

Sure! My broker is not bidding against me, nor is he going to speak to the agent. It's irrelevant.

 

To me!

 

COS = Contract of Sale

The min price would be more based on the LVR than anything else.

This stuff should be pretty simple and there is a massive breakdown in communication, trust or strategy or all 3. Did you ask all the other questions such as if she saw any issues with the security, plan B, etc?

AMP's credit is one of the most conservative of all lenders both from a policy/assessment perspective and from a security perspective.

My advice is don't bid at an auction unless you are 100% comfortable with the finance piece.

 

THIS!
If you don't know what you are doing, things could go pear shaped really quickly.

 

Valuation prior to auction - IMO valuation prior to auction pointless and over complicating.

 

Hi @Sackie - Are you aware if there is a post purely on auction strategy on PC or any other source that you know? I have read some of your earlier posts and have appreciated your aggressive approach to buy/sell.

I’d be keen to read through the tricks, traps and once property is Passed In. I’ll search with the keywords too, but would help if you know there is one and are able to point me to it. Thank you.