Understanding Property Auctions in New South Wales
1. No "Subject to Finance" Clause:
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Properties sold at auction are unconditional.
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You cannot include conditions like "subject to finance" or "subject to inspection."
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Once sold, you must complete the purchase within 42 days.
2. Pre-Approval vs. Final Approval:
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Pre-approval is not the same as final approval.
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Pre-approval shows the lender's willingness to lend based on your finances.
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Final approval requires a full property valuation and condition assessment.
3. Bank’s Valuation and Property Condition:
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Issues like asbestos or necessary renovations might affect loan approval.
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Some lenders won’t approve loans for properties with major defects unless fixed.
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The lender may conduct their own valuation and set conditions based on the property’s state.
4. Risks:
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If you bid and the lender later denies the loan due to property issues, you are still legally obligated to complete the purchase.
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This can be risky, so consulting your conveyancer is essential.
What You Can Do
Pre-Auction Inspection:
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Get a detailed inspection of the property before the auction.
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Engage a building inspector or structural engineer to assess any concerns.
Speak to Your Lender:
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Discuss the property specifics with your lender.
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Ensure that issues like asbestos or needed renovations won’t prevent final loan approval.
Talk to Your Conveyancer:
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Your conveyancer can explain your rights and obligations at auction.
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They can also address any concerns about property issues.
Summary:
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Ensure you can secure financing despite the property’s condition.
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Make sure your lender agrees to the property’s condition.
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Investigate the property thoroughly before the auction to avoid surprises.
This should simplify things for you. Let me know if there's anything else you need help with!