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When purchasing at auction, you do not have the benefit of any cooling off period if you are the successful purchaser. Therefore, it is important that you are well-prepared beforehand. The following are some important things we recommend you do before going to an auction.
We recommend you obtain a pest and building inspection or strata records inspection (if buying a strata titled property) prior to auction.
If any issues are found in the reports, this can give you a idea on how much it will cost you to fix these after settlement and consider these costs when making your bid.
If you intend to do any development work or renovations to the property, you should also make enquiries with the relevant Council.
You can also access general planning information on the NSW Planning Portal – https://www.planningportal.nsw.gov.au/spatialviewer/#/find-a-property/address
It is imperative that you have loan pre-approval prior to attending an auction. You will find that your lender will be unable to give you an unconditional approval on the purchase as the purchase price will not be known. This is an unfortunate aspect of the auction process.
Make sure you do your research and are sure you are not paying over market value for the property.
We recommend you have the draft contract reviewed by a property solicitor prior to auction. The solicitor can give you advice on the terms of the contract and point out any potential red flags depending on your situation (e.g. easements, heritage listing, zoning etc)
Your solicitor may also negotiate terms of the contract and make general queries to the vendor in relation to the property. Some common requests include negotiating a shorter or longer settlement period, payment of a 5% deposit on exchange instead of 10% etc.
Prior to attending an auction and bidding you will need to register your intention to bid with the real estate agent on the day. You should ensure that the name you provide is exactly the same as the name you provide to your lender and that your name matches on all your identification documents.
It can be difficult and costly to change your name or replace a name of any person once it is written on the contract.
If you intend to attend an upcoming auction or if you are looking to buying a property, please contact our team at Anderson Boemi Lawyers on 02 9653 9466.