If you’ve been house-hunting in Auckland, you’ll know that the majority of properties in the region are selling at auction.
This is tough for buyers. You have to do all the checks before the auction, spending time and money, running the risk of being outbid and having to go through the process again – and again!
Still, when you’re spending hundreds of thousands on a property (or over a million in the Auckland market) you need to do the correct pre-auction checks before bidding.
If you win the auction your agreement is unconditional – that means you can’t change your mind.
You take a big risk if you bid without checking the basics about a property first.
Five things to check before you bid at auction:
- Title – what type of property are you looking at? Is it a cross lease, fee simple, unit title or leasehold? What are the implications of each of these?
- LIM report – At auctions, the real estate agent often supplies the LIM to save potential buyers the cost of ordering one from the council. The LIM shows all the information the council has on file for the property, like Code of Compliance certificates and any outstanding requisition.
- Property file – In addition to the LIM, you may want to go into the Council to do a property bag inspection this is highly recommended if you suspect unconsented work has been done on the property. You can view the plans and make sure they match what actually exists. Many Kiwis have a DIY approach to renovations and do work on their homes without obtaining building consents from the council.
- Builder’s report – Before buying you should always get the opinion of a building inspector. They will do moisture tests and check things that you may have missed. This can be expensive, but compared to the cost of the house it’s money well spent.
- Finance – It is important to get finance approval in writing from your lender before you commit at an auction. Pre-approval is only half of the process – you also need to get the bank’s approval for the specific property you are bidding on.
The Conveyancing Shop Lawyers offers an affordable pre-auction check service. Visit our website www.conveyancingshop.co.nz to find out the locations and contact details of our four Auckland branches.
