Records continue to tumble in the Newcastle region's housing market surge, with more and more suburbs breaking into the $1m sale club. The auction of a one-bedroom Lake Macquarie home in November set a stunning new mark for Sunshine at $1.52m.
Selling agents in the Hunter have described receiving multiple offers on beachside locations well in advance of auction dates - in some cases before inspections have been scheduled.
As the market continues to run hot, we can expect auction action to remain high. Auction is attractive for sellers as it allows them to go to market without setting a price cap on the property.
For the purchaser, there are important considerations to be taken into account, according to James Thomson, a Director and Principal Lawyer at Burgess Thomson.
"For purchasers buying property at auction, there is no cooling off period, which means that you must make all your enquiries and inspections and have the contract reviewed prior to auction," James said.
"If the property is passed in but negotiations continue after the auction there is still no cooling off period if the property is sold on the same day it went to auction.
"It is recommended to seek legal advice regarding the contract, as if you are successful at auction any contract amendments cannot be made unless they are agreed prior to the auction."
Burgess Thomson is often able to negotiate changes to the settlement date, deposit terms, and contract conditions prior to auction.
"Vendors will usually agree to amendments prior to auction as they want to keep most buyers involved and bidding the price up at the auction," James explained. "A five per cent deposit is often requested, as if you are successful on the day the deposit needs to be paid at the auction. Check with the agent how they will accept payment of the deposit on the day, as you may need to increase your daily funds transfer limit if paying by electronic transfer on the day."
Some buyers will also request a longer settlement date if they need to sell a property or need additional time to arrange finance.
"You should seek finance pre-approval and ask the bank whether they will value the property at your maximum bid price," James said.
"It is difficult to obtain unconditional loan approval prior to auction, but your lender may be able to do a desktop valuation and confirm the maximum amount they will lend you against the property.
"You should also undertake building and pest inspections prior to auction, or if the vendor has these available, check that they can be transferred into your name following the auction.
"This will protect you in the event of major defects that are not disclosed by the inspector in the reports."
Burgess Thomson, one of Newcastle's most highly regarded law firms since 1983, is listed in the Legal 500 and Doyle's Guide of top ranked law firms, with a focus on:
James, who has over 20 years' experience, has completed the Program on Negotiation at Harvard Law School and National Mediation Accreditation Training. He holds a Master of Laws degree from The University of Sydney and Bachelor of Laws and Bachelor of Commerce (Accounting) degrees from The University of NSW. He is a member of the Law Society of NSW, Newcastle Law Society, Australian Institute of Company Directors, Commercial Law Association, Society of Trust and Estate Practitioners and the SMSF Association.
Damian Burgess founded Burgess Thomson in 1983 and has over 40 years' experience in the law. His personal approach, dedication and attention to detail ensures he has a loyal following of repeat clients. Sharon Musgrave is a Licensed Conveyancer at Burgess Thomson with over 30 years conveyancing experience and is PEXA certified.
Sue Cheal and a team of six paralegals take the time to get to know their clients and provide regular updates during what can sometimes be a stressful time in their lives.
Burgess Thomson is located at 400 Hunter Street, Newcastle, opposite the new courthouse, with parking nearby. For more information call 02 4929 5602, visit www.burgessthomson.com.au or email email@example.com.