Bidding for and buying a house at auction can feel intimidating if you have never done it before but a little bit of preparation and homework can make the process far less stressful and more empowering.
Pre Auction: Due Diligence
So you’ve found a house you want to buy and it’s being sold by auction process. First things first, you have to do your due diligence. What this means is reviewing all of the information made available, assessing and ensuring that you are ready to make an informed decision. Typically the agent handling the sale will provide you with a copy of the Title for the Property and the LIM. Those two documents should be reviewed by your lawyer. You will also need to have a conversation with your financier or bank and particularly in Christchurch you will need to discuss with your potential insurer for the property.
The vendor may provide you with a Builders Report. Be aware, this is there as a guide only. It has been commissioned on behalf of the vendor so if there is anything missing from that report, or anything not correct within it, you will not have any comeback. For this reason, it can be a good idea to commission a Builder’s Report of your own.
Typically in Christchurch you will also you will also get documentation around what has happened to the house after the quakes and what has been done to the house. Your bank and your insurer will likely want to take a look at this just to make sure that any repair strategy has been carried out correctly. Particularly for older houses in Christchurch, spend some time looking through the reports, through the insurance documentation consider getting your own Builders Report.
Some buyers get frustrated at the expense of this process, only to not be a successful bidder and having to repeat the whole process with a new property. It helps to think about what the long-term cost could be of not completing that due diligence only to find something critical is wrong with the property. This due diligence process is vital in Christchurch now following the rebuild, do not bid on a rebuilt or remediated property that does not provide the necessary basic documentation of the repair strategy.
Christchurch Regional Manager