Per Approval and Auctions

[Milkieboy]

Hi All,

I have pre approval for my first IP. Have been reading alot on here that pre approval is not really worth that much and should sign a contract with subject to finance just in case.

What do people do when it comes to auctions as there can be no conditions, how do you bid with confidence that the lender will come to the party with the money?

Thanks in advance
Ian

 

[JIT]

Hi there,

See this thread on a similar topic:

http://www.somersoft.com/forums/showthread.php?t=30292&highlight=approval

GSJ

 

[Peter_Tersteeg]

Even when you have a pre-approval, chances are you'll have to provide certain documents again prior to getting a full approval, so most pre-approvals are not really worth anything.

I do suggest pre-approvals when I've examined the paperwork and the finance looks close. The pre-approval in this case is an exercise to make sure the bank agrees with my figures.

Even with a pre-approval, it's highly advisable to still use a finance clause. Tell the agent you've got a pre-approval, but you still want the finance clause to protect your interests.

 

[JIT]

Peter, I think the issue Mikie brings up is with respect to auctions - ie. unconditional offers...which is what was already discussed in the linked thread.

Personally, I now aim to make unconditional offers on most of my resi. purchases, but, with a significant price discount. However, this does require careful due diligence on my behalf prior to making the offer.

GSJ