In a strong local property market, auction is currently a popular means of selling property.
Here are eight legal tips for purchasing a property at auction:
1. When a property is listed for auction, prospective purchasers are still permitted to submit offers for the vendor’s consideration prior to the date of auction and the property can be sold prior to the auction date.
2. Prior to the auction, familiarise yourself with the auction process by discussing the process with your solicitor and, if possible, by attending other auctions.
3. Inspect the property prior to the auction date and organise pre-purchase building and pest inspections, as required.
4. Contact your solicitor to review the proposed sale contract and negotiate any required amendments to the proposed sale contract prior to the auction date.
5. Obtain finance approval from your mortgage broker or lender prior to the auction date.
6. If you are the successful bidder you will be required to provide a deposit of usually 10 per cent of the purchase price immediately after the auction.
7. Register as a bidder prior to the auction date and be sure to have your photo identification with you on the day of the auction.
8. If you are successful in purchasing a property at auction, you should expect to be bound to purchase the property without a cooling off period. It is primarily for this reason that you should contact your solicitor to obtain legal advice prior to the auction date.
If you are planning on purchasing a property at auction the key is preparation.
If you keep the above eight things mind – you will be well placed and better informed come auction day.