Buying at AuctionCall us on: (02) 4731 1897

Buying at Auction can be a nerve racking experience so it’s a good idea to familiarise yourself
with the process by attending several auctions as a spectator before you go to buy.

Step 1 - Arrange your finance: You should have a written loan approval before the day of the auction.

Step 2 – Inspect the property: Inspections of the property are usually conducted in the company of the Agent who should know the features of home and should be able to answer your questions about the facilities in the local area. Viewing times are normally specified, giving everyone equal opportunity to inspect the property before the auction. Getting an appointment for inspections at other times can generally be arranged.

Step 3 – Get a Valuation: Properties are normally subject to a reserve price (unless otherwise advertised). A reserve price is the minimum price that the person selling will accept. Even though the Agent cannot disclose the reserve price, you can get an idea of what it will be worth by

• Asking the Agent what similar types of properties are selling for in the area
• Researching the prices at which similar properties in the area sold for
• Receiving a valuation from the lending institution
• Engaging a registered valuer to complete a formal valuation.

Step 4 – View the Contract of Sale: The Contract of Sale is prepared prior to the Auction. If you are seriously interested, you should have your legal representative inspect the contract. Your legal rep may suggest additions or variations to the contract. These can be negotiated with the seller and if agreed, the contracts will be amended accordingly. At the auction before the bidding starts, go up to the agent and check that your copy of the contract is an exact copy of the auction contract. Ensure you have a clear understanding of what is to be included in the sale.

Step 5 – Bidding at the Auction: Before starting the auction, the auctioneer will announce in clear terms if GST is to apply or not. There are several conditions of sale by public auction for real property including:

• The highest approved bidder will be the buyer subject to the reserve price and the seller’s approval. The seller may bid either personally or by a representative.
• The bidder warrant the ability to enter and complete the contract of sale in accordance with it’s terms.
• Any person bidding n behalf of another person must provide the Auctioneer with a copy of their written authority before the auction; otherwise the bidder will be taken as acting on their own behalf.
• Immediately on the fall of the hammer, the bidder of the highest bid must sign as a buyer the Contract of Sale in the form displayed or circulated with these conditions of sale and pay the deposit to the nominated stakeholder.
• The deposit payable under the Contract of Sale is 10% of the purchase price or any other percentage or figure nominated in the Contract of Sale.
• The seller and the buyer agree to sign all documents and do everything else necessary to transfer the property to the buyer. The seller & buyer each appoint the Auctioneer their Agent to sign the Contract of Sale on their behalf. This appointment is non revocable.

Step 6 – Closing the deal: If you are the successful bidder, you will be required to sign the Contract of Sale and provide a deposit, usually 10% of the purchase price. You will generally be expected to have the funds available immediately (many people bring their cheque books). Contracts will then be forwarded to both the seller and buyer’s legal representatives for their attention. Settlement should occur within 30 days. Congratulations!