Are you attending an auction or considering purchasing a property at auction?
We strongly suggest that you get thorough professional advice prior to attending auction. One of the important aspects of sale of property by auction is that there will be no cooling off period i.e. if you are the successful bidder, the contract will become binding upon you as soon as you sign it. In that case, please speak to the auctioning agent to arrange how you would pay the deposit if you were the successful bidder and how much deposit they expect you to pay – the standard is 10%, but can be negotiated and will usually require written confirmation from Vendor’s Solicitor/Conveyancer. We strongly recommend that you satisfy yourself in respect of all these matters prior to signing the contract or at least before the cooling off period expires (if applicable):
- to secure written, unconditional finance approval
- to negotiate the terms & conditions of the proposed Contract of Sale
- to request the Vendor to provide additional information or documents
- to obtain building, pest and/or strata records inspection reports (as applicable)
- to personally make any further inquiries, for example at Council, with neighbors, other real estate agents, a builder, architect or other professional, or
- to simply decide whether you wish to buy this property or rather keep looking for another one or none.
- to take photos of the entire property to be able to provide sufficient evidence in the event that any pre-settlement claim for damages arises. We strongly recommend this and suggest that you do this prior to signing the contract is possible.
Prior legal advice from Sydney Covneyancing could help you in understanding, negotiating the terms and conditions of the contact and cover avoidable risks. We will review the Contract of Sale, provide detailed feedback to you prior to attending auction and if required negotiate any aspects of the contract with Vendor's Conveyancer or Solicitor.
Buyers and Sellers Consideration in an Auction Process
If you are the buyer, you need to analyse certain aspects before you decide to purchase a property in an auction. Since there is no ‘cooling-off period’ when you buy a property at an auction, you need to:
- pre-approved finance prior to the auction date and understand properly the actual worth of the property you propose to buy. You should also have accessibility to deposit funds as you may need to pay a minimum deposit on the auction date in case you turn out to be the successful bidder;
- conduct pre-purchase searches of the property before the auction date;
- obtain from a licensed valuer the correct valuation of the property; and
- choose and select a conveyance before the auction date in the event you are named as the highest bidder at the auction.
Auction in New South Wales (NSW)
If you are purchasing a property in NSW, you cannot bid at an auction till you give the selling agent your relevant details along with a proof of your identity. The details so given will be entered in the Bidders Record and a bidder’s number will be assigned to you. Registration is required if you are bidding on behalf of a:
- Person: When you are bidding on behalf of a person, you need to give a letter of authority from him/her along with his/her identity proof; or
- Company: An authorising letter on the company’s letter head and the Australian Business Number (ABN) should be recorded in the Bidders Record.