Auctions are the worst part of the home buying process for many buyers, but you know the old saying… knowledge is power. So knowing what steps to take before and on auction day can make the experience far more enjoyable and successful.
Firstly, do your due diligence. The time for that is well before auction day because when you buy at auction the sale is unconditional. That means no ‘subject to’ clauses and no cooling off period. So arrange a building and pest inspection promptly when you find a property you are interested in buying, and ensure it is completed well before auction day.
Also arrange pre-approved finance before auction day, and have the deposit ready for immediate payment if yours is the winning bid.
On auction day, stand where the auctioneer can see you and hear your bids clearly. If bidding reaches the seller’s reserve price, the property will be sold and if the winning bid is yours, you will immediately sign a binding contract of sale.
If bidding doesn’t reach the reserve price, the property will be passed in and private negotiations may commence. The first opportunity to negotiate privately goes to the highest bidder. If that is you and you negotiate successfully, be aware that you are still buying under auction conditions because they are in place for three days before and three days after auction day.
Once you’ve signed the sales contract, organise immediate insurance cover for the property. The legal transfer of ownership process will commence, handled by your legal representative. Settlement will typically occur within 60 days, but you can negotiate a different settlement period beforehand, which might be 30, 45, 60 or 90 days.
Lastly, open a bottle of champagne and celebrate!
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By Wendy Chamberlain
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