If you have chosen to buy a property that is being auctioned, then there are a few tips we can offer that you may choose to consider before attending an auction and signing an auction contract!
Firstly a few facts that you may not know!
- Did you know that when you purchase at auction there is no cooling off period?
- Did you also know that generally speaking there are no conditions associated with your contract when you purchase a property at an auction?
What does this mean for you?
If you are the successful bidder at an auction you will be required to settle the Contract on the nominated settlement date even if:
- You obtain a pest and building inspection and you are not satisfied with the results;
- You do not obtain finance approval;
- Your banks valuation does not reflect the contract price; or
- You change your mind.
It is important to remember that once a contract is signed you cannot amend the terms without consent from the other party to the Contract. This can result in excessive delays and unexpected additional costs.
What you should do if you become interested in a property before attending the auction?
Here are some top tips to consider before attending an auction:
- Attend as many open houses and inspections of the Property;
- Undertake a building and pest inspection;
- Speak to your bank and get a realistic understanding of a purchase price you can afford to pay and what your banks potential conditions will be to ensure that these can be met;
- Obtain a valuation;
- Do your own research of the market;
- Speak to the agent and understand how much deposit you will be required to pay; and
- Obtain a copy of the Contract of sale and have your conveyancer review the contract before the auction.
As an Bidder in an Auction you are entitled to submit to your agent conditions associated with your bid. We are happy to review your proposed contract prior to signing to ensure that all of the details disclosed are accurate and to provide you with suggestions of amendments which may suitable to your specific circumstances. If necessary, we can provide you some conditions that can be inserted into the contract if the seller agrees prior to the auction.
Keep in mind that you will be required to pay the deposit upon signing of the contract (which is usually once the auction has closed). This deposit can be up to 10% of the purchase price detailed on the Contract.
The Team at A.L.F. Lawyers is available for you to discuss the auction process, review and advise you on the auction contract and assist you with any conditions that you may require in the advent that you are the successful winner of the auction.
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