A property owner may decide to Auction their property for a number of reasons. It may be because the market is booming and they feel that they will get the best price for their property at an Auction or their property has unique qualities making it difficult to put a sale price on it. Auctions may also be required as part of a deceased estate or a liquidation of a bankrupt estate.
If you are looking at making a bid on a property at Auction be aware that:
- there is no cooling off period;
- if you are the highest bidder then provided that your bid is higher than the reserve then you are bound to complete the purchase; and
- properties up for Auction are for sale "unconditionally" meaning that the contract will not contain any conditions for the benefit of the purchaser such as a time period for the purchaser to secure finance or conduct any due diligence enquiries (such as a building reports).
If you are thinking buying at an Auction, it is important that prior to the Auction you:
- ask the Agent for a copy of the Auction Conditions (Contract) and then take it to your Solicitor for review to ensure that there are no unusual or particularly onerous conditions;
- conduct your due diligence enquiries (such as building inspection and queries to Council as to any restrictions on the use of the property) prior to the Auction;
- ensure that your finance is in order so that you can complete the purchase if you are highest bidder; and
- bring your cheque book (or credit card) to the Auction ensure that you can pay the deposit if you are the highest bidder.
Some important points to note about Auctions:
- the reserve price is the lowest amount that the seller will accept for the property. You should note that the reserve price is normally not disclosed to bidders, although the auctioneer should advise the bidders when the reserve price has been reached; and
- if the reserve price is not reached the seller makes the decision whether or not they negotiate with highest bidder or re-list the property on the open market.
The most important thing for you to remember is that if you are the successful bidder at an Auction, and that the reserve price has been passed, then you must sign the contract and pay the deposit then and there.
Buying and selling property is an exciting and rewarding experience. However, in our experience if you do not seek the assistance of a solicitor to assist with your conveyancing, it may cost you substantial time and money.
Whether you are buying or selling property at an Auction in Tasmania, Cormiston Legal can assist. Please contact us on 03 6332 9353 or use our Contact form - https://www.cormistonlegal.com.au/contact-us/