How do you go underconditional prior to auction?

Hello,

I have pre-approved finance at present in writing from CBA valid for 6 months. I wish to sign a contract prior to auction on a property & the agent's saying that the contract would have to be unconditional with no conditions attached to it. How do I go about this? Do I have to speak to CBA & get them to value the property, etc?

Many thanks.
 
you would need to have no finance or pest and building clauses.
So you would need confirmed finance, plus have done pest and building reports etc.
Pen
 
you would need to have no finance or pest and building clauses.
So you would need confirmed finance, plus have done pest and building reports etc.

Yes, as pennyk said OR you just take a punt and hope that a lender / valuer will agree with the figure you paid and that the place is OK for P&B - quite a risk but I see people do it all the time (I am not advising this course of action btw) ;)
 
You just need to enter into the contract without any conditions - hence 'unconditional'.

However, this is very dangerous without finance approval. You should contact the CBA and supply them with a copy of the front page of the contract and ask for full approval. They will then do the valuation etc and the rest of the processing.

Once you exchange contracts you are locked in so if you exchange before finance is approved, and then it is not you could be in trouble.
 
at the VERY least its important to make sure u get the place valued and ensure its suitable security.

In real terms, formal finance approval should be sought before exchange of contracts, But in some instances thats not possible.

ta
rolf
 
exactly what rolfie said.
you can get it valued upfront then know you wont have a security issue.
Problem is often whether the auction price and the valuation price are the same.
 
Problem when auction price and valuation differ.

You cannot get unconditional finance approval for an auction, unless you are using another security to do the lending.
In practice, it is very rare for a valuer to dispute an auction result, as a public auction is the epitomy of the 'market' for residential property. However it is theoretically possible for the valuer to value the property less than the auction price, (especially if you ask for a valuation prior to the auction!) in which case your in a bit of strife...
Its very hard for First homebuyers to purchase at auction usually. 2nd home buyers usually have some 'wiggle room' if the val comes in short to use the equity in their existing property.
 
Yes, what happens if you do the valuation and it comes in at $x and then you get carried away and pay $x+ $50k at the auction? The bank's valuer is unlikely to want to increase the valuation.
 
Hello,

I have pre-approved finance at present in writing from CBA valid for 6 months. I wish to sign a contract prior to auction on a property & the agent's saying that the contract would have to be unconditional with no conditions attached to it. How do I go about this? Do I have to speak to CBA & get them to value the property, etc?

Many thanks.

Have your Broker book a Customer Organised Valuation of the property. CBA have been offering this for some time.

Hope this helps
Kristine
 
I have made unconditional offers in the past before I have even spoken to lenders.

I am about to do this again.

I have at least a 50% deposit and access to more if necessary.

I also know what properties are worth in the are I am looking at.

I only do 5% deposit .. in case it all turns to crap.

I was at an auction on the weekend .. I negotiated 5% deposit only with the agents before the auction .. it went way over what I thought it was worth .. (I hope the purchaser has their finance all sorted out and will not be relying on my valuation) so didn't bid.

I have recently valued a properrty purchased before auction, the purchasers required finance, hence I was doing the valuation... based on the available sales evidence I was significantly under their purchase price ... I hope they have a back up.

Making an unconditional offer prior prior to auction while requiring finance and/or with a high LVR can be very risky .. unless you know the price is well supported with recent sales evidence (not just one other sale).

But remember the old saying .. Fortune favours the brave.

good luck,

cheers

RightValue
 
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