What’s the real cost of getting ready for an auction?

Once the hammer falls at a Gold Coast auction it's all over. If you're the highest bidder, you're legally obliged to purchase the property and you must have all your ducks in a row so that you can go through with the sale straight away. 

What does this entail? Several checks, some professional assistance and a few costs, which could cause trouble if you're not expecting them. To avoid any unpleasant surprises, and make sure you're ready to buy at auction, we've whipped up a list of essential costs to be aware of pre-auction. 

1. Building report 

Attaining a building report is essential before buying as it will make sure you're fully aware of any problems with the property before committing. The results could lead you to lower your highest bid or even avoid the property completely.

There's no standard rate for a building report, however Home Improvement Pages estimates the price at between $200 and $1000. This depends on the size of your property, as well as whether it's located in the regions or near a city centre (reports may cost more nearer to the city). 

2. Pest inspection

A pest inspection may not be necessary for all properties – new builds and high rise apartment buildings in particular. However, if you're not sure, it's always worth checking as treating a termite problem could cost you as much as $5000 to fix once you've bought an infested property, according to the Australian Pest Control Association. 

The $250 to $350 that a pest inspection will set you back is a far better price, we're sure you'll agree. 

3. Conveyancer 

There's a lot to know when it comes to inspecting and drawing up contracts of sale, as well as all the other documents needed when buying a property in Surfer's Paradise. With that in mind (unless you have sound property law knowledge) it's best to leave these tasks to a conveyancer.

A conveyancer specialises in overseeing the legal side of sales , giving you peace of mind that everything is above board. They don't come cheap though – the Australian Institute of Conveyancers estimates the average cost per sale at roughly $900 to $2,200. 

4. Mortgage fees

You'll need to have your finance sorted before buying anything at auction and there may be some fees associated with doing so. Usually referred to as an establishment fee, its actual cost varies depending on your lender and the conditions of your loan.

AMP's establishment fee for example is $350 and only applies if you're borrowing 90 per cent of the loan's value, or are using another single property as security. Make sure you know what this cost will be before signing anything, as it could be more than you'd expect. 

5. Valuation

There's few things more essential prior to buying property than a valuation. This document will tell you the market value of the property, guiding your decisions about what you're willing to pay and ensuring that you don't bid over what it's worth. 

The cost of a valuation will depend on a range of things, from how much detail you require and the location of the property you want valued. Onproperty puts the cost of a valuation in city centres at around $300 to $600, while a valuation for more regional properties may set you back up to $1000. 

These are just a few examples of essential costs before attending an auction, and there may be more. If you're feeling unsure get in touch with the team at your local real estate agency and they'll happily set you in the right direction.