QLD: Mortgagee auction advice

Hi everyone,

I’m looking at purchasing IP2 in Logan QLD and it’s a mortgagee in possession auction.

The auction isn’t for another three weeks, poorly timed after first week of December.

Does anyone have any advice as to whether to place an offer before auction and see if the bank would be willing to sell prior to auction, given it’s been badly scheduled? Or best bet to wait for the auction? Has anyone forked out money for b&p in this instance?

The property is probably worth $350k but I’d love to think I can secure it for less given the nature of the sale.

Any prior experience / advice re these types of sales would be great

Thanks!

 

Certainly in times past, you didn't have a hope of buying prior to auction where it's MIP - they want to be able to demonstrate that they took the highest offer possible; going to auction is pretty much how they can demonstrate they took reasonable steps to obtain the best price.

 

They prob won't accept offers before hand and prob won't be willing to amend any terms of the contract ethier. Won't hurt to ask tho

 

Notsure where but at the moment Logans a tough market for sellers
Pretty sure youll end up fighting with the bank at auction (reserve/ vendor bid) etc

 

And the contract terms on those sales can be killers too - completely one sided towards the seller.

Make sure you have a good property lawyer acting for you and you understand what they can and can't do.

The one time I bought from a mortgagee sale basically the vendors messed me around for more than a month with the original scheduled settlement date and I couldn't do anything about it.

 

Ahhh yes that's a very good point. Do you recommend I wait for the auction, I doubt I have enough time to go unconditional before the auction now.

Agents are pretty hard to work with but they've said the vendor may accept offers but they have to be compelling enough to call off an auction.

 

Reckon it's worth waiting it out for auction? Should I get a B&P done prior?

I hear clearance rates and auctions in general don't perform well in QLD..

That is crazy... are you able to shed some light or one or two examples re the contract terms that appeared, and what they did at settlement? Sounds intense.

 

Unfortunately, I believe its par for the course actually.

Basically they could cancel the contract whenever they wanted and with no penalty. Same for extending settlement for up to 90 days or something without penalty and without the buyer being able to even terminate.

About a million other things too.

 

That’s just crazy. Wow. Sounds like the greedy banks are milking their interest and fees etc.

 

Definitely talk to the agent to see if they're willing to accept offers prior to auction - doesn't hurt to ask. Worst you'll get is a no

And you never know, given the timing, you might be the only buyer rocking up at the auction. Then your only competition is the vendor bid.

In relation to B&P - suppose this is where you need to weigh up whether it's worth doing it upfront or not. Depending on the age & condition of the house, my personal opinion is that if you are able to get a builder to inspect the property with you then that could mitigate the risk at a very high level as a workaround to B&P report. If the place looks a bit shonky then best to get a full B&P done upfront, and factor that cost in as part of the offer price.

All comes down to the perceived risk I guess

Cheers,
David

 

Awesome, thanks David! Might try putting in an offer prior to auction. It’ll be pretty low, so the worst case scenario is no like you said!

It does look pretty neat as the bank have replaced carpets and painted walls, but I’m sure issues will be hidden as is the case with any established property