The sale of a property by auction refers to a process of marketing a property to prospective Buyers to be sold on a particular date to the person willing to pay the highest price for the property provided that that price is greater than the owner’s reserve price.
Preparing for an Auction
f you are considering purchasing a property at auction, it is important to be aware of the following:
- It is possible to negotiate amendments to a Contract for a property being sold at auction. However, any such amendments should be agreed in writing prior to the auction and are typically negotiated by a Solicitor on your behalf before the auction date.
- The Seller has the right to make one (1) bid at the auction. This can be made by the Seller or by the auctioneer or a real estate Agent on the Seller’s behalf. However, if this occurs the auctioneer must announce the bid as a Seller bid.
- You cannot rely on any building or pest inspection report provided to you by a real estate Agent. This is because the inspector who has prepared the report does not owe any contractual liability or duty of care to you and, therefore, would not be liable to you if the report is inaccurate or misleading in any way.
- You need to register to bid at an auction. To register, you need to provide proof of identity (for example, a drivers license, Council rates notice, vehicle registration papers etc) to the selling Agent as well as your name and address. Your details will be recorded by the selling Agent and you will be provided with a bidder’s number. If you are bidding as a couple or with a partner, only one (1) of you needs to register to bid.
- If you are the successful bidder at an auction you will be bound to purchase a property from the moment the auction ends regardless of the fact that you have not yet signed a Contract. You will also be required to pay the deposit (usually 10%) immediately after the auction. Ideally, you have obtained a formal loan approval before attending the auction. Remember that there is no Cooling Off Period following the purchase of a property at an auction.
- You should not bid at an auction unless you have obtained advice from a Solicitor about the property and the Contract.
Before bidding at an auction you should have undertaken Steps 2 and Steps 6-9 as detailed in The Ultimate Conveyancing Guide.
The Ultimate Conveyancing Guide
The Ultimate Conveyancing Guide is a comprehensive step-by-step guide to buying residential property in New South Wales.
The aim of this Guide is to assist buyers to more fully prepare themselves to buy residential property and understand the legal issues and procedures involved. Read more…