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How to arrange finances for buying at an Auction (VIC)

Discussion in 'The Buying & Selling Process' started by TheRayTracer, 23rd May, 2016.

  1. TheRayTracer

    TheRayTracer Member

    Joined:
    21st Jun, 2015
    Posts:
    10
    Location:
    Melbourne
    Hi!

    With auctions growing in popularity in recent years in the outer suburbs, I would like to know how one goes about arranging finances to be in the best position on Auction day. For context, I have only purchased via private sale in the past. When buying via private sale I have always added the clause "subject to bank approval..." and it's always been a "big 4" bank. Normally I'd sign the contract, and then bank would do their valuation and the loan goes through without issue.

    Although I am pre-approved for $x amount of dollars, and have in excess of 20% of an expected auction sale price, the bank is unable to complete a valuation without signing a contract. Catch 22. It would be helpful to hear how people bid confidently at Auctions knowing a bank / mortgage broker are behind them.
     
  2. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,151
    Location:
    Canberra and Sydney
    You've gone as far as you can in terms of getting approval - there's not much else you can do.

    Cheers

    Jamie
     
  3. Joynz

    Joynz Well-Known Member

    Joined:
    5th Apr, 2016
    Posts:
    831
    Location:
    Melbourne
    Don't go over your budget in the heat of the moment. Make sure you know the values in the area.
     
    York likes this.
  4. Jerry O

    Jerry O Well-Known Member Premium Member

    Joined:
    21st Jun, 2015
    Posts:
    361
    Location:
    NSW / Melbourne
    As Jamie said, you have done your part in getting your finances sorted pre-auction.
    Just stick with that budget or less than that amount, pre-approval letter would only have subject to satisfactory valuation clause as their condition to move to unconditional approval.
     
  5. JacM

    JacM VIC Buyer's Agent Business Member

    Joined:
    12th Jul, 2015
    Posts:
    1,116
    Location:
    Melbourne, Australia
    It is a risk and thus frustrating for people wishing to buy into areas where most things go to auction.

    I watched in disbelief the other day as a chap had a loud conversation in the bank with a bank staffperson about how to pay his deposit at auction. What appeared to transpire was that he had some kind of blank cheque that he must not lose etc. He walked out of there pleased with himself and I thought ummm loud conversations like that overheard by the wrong kind of person will get you jumped and robbed, champ !! No street smarts at all.