Buying at Auction – What you need to know BEFORE the auction day
Buying a property, like so many other significant life decisions, can often be a daunting process. As a great deal of properties are now going to auction, it is important for buyers, both new and old, to understand the processes involved so that they may bid confidently come the auction day.
In order to assist you with this process, we have prepared a quick reference guide for buyers looking to purchase by way of an auction.
Steps to consider:
- Review Contract
Have Tetlow Legal review the marketing contract well before the auction date. This allows us to ensure that the contract is compliant and that you are aware of any substantial defects disclosed in the contract. It also allows us to negotiate on your behalf for any terms that you wish to have altered, for example; longer settlement periods, reduced deposits and/or additional Goods.
- Inspect the Property
Thoroughly inspect the property before the auction day. You should satisfy yourself that all Goods are in proper working order and that the gas, water and electricity are functioning properly. If you are successful on the auction day, you will be buying the property ‘as is’.
Ensure that your have your finance in order before making an offer. If you are obtaining mortgage finance, you should obtain pre-approval for an amount above your maximum purchase price. Pre-approval is not confirmation of how much the lender is willing to provide you but rather an indication of what you may be able to borrow. Ultimately the amount the lender will provide will depend on the value of the property you have purchased as determined by a formal valuation. It is important to ensure that you have the adequate funds available to complete the purchase and within the timeframe stipulated in the contract.
Organise in advance of the auction a deposit cheque or deposit bond for an amount equal to 10% of the purchase price.
Thoroughly research the area and surrounding suburbs before the auction day, so that you are comfortable in the amount you are prepared to pay for the property, and can bid confidently on the day.
Have a strategy going into the auction and set yourself a maximum purchase price. Stick to that maximum price. If you feel as though you may be too emotionally attached to bid at the auction yourself, then organise with the Agent to have someone bid on your behalf. If you elect to do so, you must provide a written signed authority to the Agent authorising the person to bid on your behalf.
- Bring ID
- Register to Bid
- Successful Bidder
If you are successful at the auction you will need to provide our contact details to the Agent. The signed contract will then be delivered to our office and we will contact you to discuss the next steps.
It is important to remember that if you are the successful bidder you will be asked to sign the contract immediately following the auction. In doing so you will be entering into an unconditional and legally binding contract.
If you or someone you know is looking to purchase a property at auction, please contact Emma Bragg at Tetlow Legal on (02) 6140 3263 or at firstname.lastname@example.org.