It is important if you plan to buy at an Auction you fully understand how an Auction works and what commitments you will have should your offer be accepted. We recommend you seek legal advice before going ahead with a purchase at auction.
If the property you’re looking to purchase is going to be sold at Auction, it is a good idea to attend a few prior to bidding, to understand how they work.
The terms of an Auction usually state that once your bid is accepted it is unconditional and will have no special terms; for example: “subject to finance”.
A copy of the Auction Terms and Conditions can be received from the Auctioneer or real estate agent.
Before the day of the auction make sure you inspect the property, arrange your finances and have the deposit funds available if your bid is accepted.
Complete all necessary checks, such as: building and pest inspections, title searches, property valuation, and your own research. Also, make sure the property is within your budget; set a price and stick with it.
Ask the Auctioneer how much is required for the deposit on the day and what method of payment is accepted (cheque, bank cheque, EFT, or deposit bond).
It is also important to ask the auctioneer what the settlement terms are and if there are any special clauses in the contract. We recommend you seek legal advice before going ahead with a purchase at auction.
In some states, seller (vendor) bids are acceptable up to the seller’s reserve price. Once the seller bids to the reserve price the property will then be declared on the market. Vendor bids must be announced by the Auctioneer prior to the auction commencing. It is illegal for Auctioneers to be involved in dummy or false bids once the property is on the market.
To learn more about property auctions visit your state Real Estate Institute website or contact your solicitor.