I was at an auction the other day. A strangely exciting spectator sport to me. That’s once past the boring preamble by the auctioneer, doing their best to convince the crowd that this is the best property in the land! Finally the auctioneer takes a breather; it’s thrown open to the crowd for bids. Now I’m standing in the thick of the awkward silence, the air now filled solely with anticipation… Who is going to start the bidding? Will it be passed in? Or more typically, how far over the quoted price is this one going to go for?!$$$
But this blog post is about what happens before the auction… no actually it’s about what doesn’t happen before the auction. I keep seeing the same mistake over and over, and I want to change that, so here’s some very important auction advice.
To get a feel for a place, and an idea of if you want to commit yourself to a 25 year mortgage to call it yours, there is the pre-auction inspections. In just a half hour window, one has to decide – is this the house you want to come home to every night for the next how ever many years?! That’s a very big decision to make in a very short period of time.
Prior to this particular auction I wandered around the house to get a feel for the place, whilst doing so I took notice of the other people doing the same. In this case a very cute little weatherboard Edwardian house, I’d say about 100 years old, needed someone new to call it home. I could see the excitement on a few people’s faces hoping it would be theirs. What I also saw, they couldn’t! Here comes the juicy bit…
This house had been recently renovated and presented really well. But I saw much more: significant problems! Unless you had a high level of building knowledge, you would not have seen this. But within just a few steps inside the house, I could see structural issues, which the owners, now the sellers had recently patched up… A coincidence? I think not! The new owners would be seeing large cracks opening up in the walls, within a few months of moving in. That’s because patching cracks solves nothing, the cracks will continue to open further, the only way to stop it is to stop the cause. In this case that would be a job of around $25k to $30k to fix! The recently polished floors were collapsing too, yet more dollars to make right. Sadly however, I did not see a single person inspecting the home realising this. That is because they wouldn’t know unless they are builder or architect.
This is something I see often, houses with serious problems, and people putting their hand up at auction, spending their life savings to later find out they now own these problems. This particular house was not as bad as other’s I’ve seen. And it is not just structural issues that can make a bad purchase. For example there’s poor orientation – the direction in which the house faces. Would you know from a half hour inspection that the house would be dark all year round, not just on the overcast day you looked at it? Or that it will be incredibly hot during summer and cost you a fortune to cool? These unlike structural issues, often can’t be fixed!
You research when you buy a camera for just $500 dollars, by reading an experts review online. Before buying a car you may read a road test by a motoring journalist to understand if it’s a good buy. Yet buying a home, usually the largest sum of money people will spend in their life, is bought without any research, the decision made on emotion and feel alone…
My advice – Call in an expert. Get the house inspected by a professional. I have told several potential clients not to buy a house they had their heart set on. I told them to keep looking, as for the same money they will buy house that will not cost tens of thousands to fix.
And now to the shameless plug – I can inspect a place for you, let you know what if any extra costs you’ll be up for, what it will cost if you are buying to renovate, what you could develop on the site etc: Click here for more info.
Happy bidding, I hope.