Frequently Asked Questions
Pre-Auction Preparation
As a prospective buyer, conduct thorough research on the property and the local real estate market. Review current listings, recent sales data and comparable properties to determine the property’s value.
Attend open homes and arrange private viewings to inspect the property physically. This step allows you to assess the condition of the property and identify any potential issues.
Seek advice from a solicitor or property conveyancer to review the contract and ensure you understand the terms and conditions. Amendments may need to be made to the contract, this needs to be done prior to auction day. Ensure you have spoken to your broker or bank to organise your finances and get pre-approved for a loan if needed.
To participate in the auction, you must register as a bidder. This involves providing identification and signing a bidding registration form.
Auction Process
The auctioneer will begin the auction by introducing the property and explaining the rules of the auction. They will then invite bids from the attendees.
Auction Bidding
If you intend to bid, make your intentions clear by signalling to the auctioneer. Bids are typically made in increments and the auctioneer will announce each new bid.
Winning Auction Bid
The highest bidder who surpasses the reserve price (the minimum price the seller is willing to accept) will secure the property. The auctioneer will declare the property “on the market” when the reserve price is reached, indicating that the property will be sold to the highest bidder.
Post-Auction
These are all of the steps that take place once the auction has finished.
Signing the Contract
If you are the successful bidder, you will be required to sign the auction contract and pay the deposit immediately after the auction.
Settlement
After signing the contract and paying the deposit, the settlement process begins. This is when the balance of the purchase price is paid and ownership of the property is transferred to the buyer.
You will need to complete paperwork sent to you by the selling agent. This is to register as a bidder for the auction. As part of the registration process, you will need to provide a valid form of identification. This could include either a driver’s license or passport. The identification is used to verify your identity and ensure you are eligible to bid at the auction.
Upon completion of the registration form and verification of your identification, the auctioneer or the agency will assign you a unique bidder number. This number will be used to identify you during the auction. Ensure that you ask any questions that you have to understand the auction bidding process, rules and conditions of the sale.
No, when purchasing a property at auction there is no cooling off period. When a property is sold at auction, the sale is considered unconditional. This means the buyer is legally bound to proceed with the purchase once that have successfully won the auction.
Payment and deposit requirements for a property bought at auction in New South Wales are crucial aspects of the auction process. When purchasing a property at auction the contract is unconditional, therefore you must meet the requirements and pay the deposit immediately. If you successfully win the auction, you must be prepared to pay the deposit. This is usually 10% of the purchase price but your solicitor may have negotiated a 5% deposit when amending the contract.
Deposit
The deposit is a percentage of the purchase price. Its purpose is to demonstrate good faith and commitment to the property purchase.
In NSW, the standard deposit amount is usually 10% of the final purchase price. For example, if the property sells for $1,000,000, the deposit required would be $100,000 (10% of $1,000,000).
Payment at Auction
Payment of the deposit at auction is required in the form of a bank cheque or electronic funds transfer (EFT). Cash payments are usually not accepted due to security reasons.
Settlement
The settlement period is the timeframe within which the buyer is required to pay the remaining balance of the purchase price to complete the transaction.
In NSW, the standard settlement period is often 42 days after the auction date. However, the settlement period may be negotiable between the buyer and seller. This will be specified in the auction contract.
