Buying first IP

[tangychips]

Hi guys,

I'm attempting to take the plunge of buying my first IP.

I have a preapproval for a loan of 200k with a deposit of 20%.

However, the property I am thinking of purchasing is going to be held as a mortgagee auction - I have been told that if the bidders will have to make an unconditional offer when they bid as it is an auction.

As a result I called up my mortgage broker and he was told that it should be fine as long as the bank approves the property... should I listen to him? (I don't want to get shafted)

I am aware at this stage (2 weeks before the auction) that I should find a solicitor or surveyor. What is the difference between a solicitor and surveyor?

Please help somersoftians

Cheers

 

[antistar]

Good luck with the auction tangychips. A mortgagee auction is a great place to start.

You definitely need a solicitor ready to go and you also want to do as much independent research on the property in question before the auction (sales data on similar properties in the area, property specifications vs compliance with bank lending criteria etc). You can also ask your broker / bank whether they would approve this particular property up to your maximum spend limit. You will be more confident bidding up to your limit with a prior blessing from your bank.

Lastly (although it may be very with this difficult being a mortgagee auction) you can try and ask for a long settlement in order to get yourself some more time to source / sort out finance in case things don't work out. But you shouldn't need this if the bank gives you a pre-approval on the specific property within your budget.

 

[Peter_Tersteeg]

Buying at an auction is essentially the same as an unconditional offer. You're the highest bidder, it's sold and there's no special conditions.

If you've got a pre-approval that's been properly assessed (which is probably is unless it's via BankWest or one or two others), then that's about as good as it gets. The only outstanding item would be the valuation which is likely to be fine unless you get carried away at the auction.

A solicitor is qualified to give legal advice, a conveyancer isn't. A conveyancer is a specialist in settlements whereas a solicitor is more of a generalist in this area. I'd suggest that you engage a conveyancer who works in a solicitors office. That way you get the specialist doing the work more competently, but you've got the legal backup when it's appropriate.