Buying at auction · Know before you bid
Auction day moves quickly. Your finance preparation should not.
Buying at auction is generally unconditional and legally binding. That makes it important to understand your budget, pre-approval conditions, deposit requirements and property risks before you bid.
01
Have your finance reviewed beforehand
There is generally no cooling-off period, finance clause or building and pest clause at auction. If you are the successful bidder, you are expected to complete the contract even if finance does not proceed as planned.
02
Key risks to consider
- The lender valuation may be lower than your winning bid, leaving you to cover the shortfall
- A high loan-to-value ratio can mean fewer lender options, higher pricing or Lenders Mortgage Insurance
- Overbidding may place your deposit and settlement at risk
- Your financial circumstances or lender policy may change after pre-approval
- Unusual, rural, small or specialised properties can require extra lender checks
- Stamp duty, legal costs, inspections and repairs need to fit within your available funds
03
Your auction-ready checklist
- Confirm a comfortable bidding range and absolute ceiling.
- Understand the conditions and expiry date of your pre-approval.
- Arrange independent legal advice and property inspections before bidding.
- Check the deposit required on auction day and how it must be paid.
- Discuss the specific property with SPECK Finance before the auction.
- Do not bid above the amount you can fund if the valuation comes in low.
FAQ
Questions people often ask
Can I make an auction contract subject to finance?
Auction purchases are generally unconditional. Obtain independent legal advice about the contract and auction rules before bidding.
What happens if the bank valuation is lower than my bid?
The lender may base the loan on the lower valuation, which can increase the deposit you need or require a different lending solution. Alternative finance is not guaranteed.
Is a pre-approval enough to bid?
Pre-approval is an important preparation step but is not final approval. The property and all remaining conditions still need to be acceptable to the lender.
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