Buying at auction can be an exciting process. However, it is not one that should be taken lightly. Auction contracts are generally unconditional contracts, which means, that once you sign on the dotted line, you are legally obligated to purchase the property. This blog provides some examples of the challanges.
How does an auction work?
There are various rules to how an auction should be run, however each auctioneer generally has their own specific style which they use to run an auction.
An auction is a public sale which is conducted by an auctioneer. At least thirty minutes prior to the auction the agent must display documentation regarding the property. The auctioneer will then make an announcement detailing various information about state laws and rules which apply to this auction.
The auctioneer will ask for an opening bid and then set the amount by which the bid increases. These are called bidding rises or bidding advances.
Once the reserve price has been met the property is considered to be on the market and will be sold to the highest bidder. If the reserve price is not met the auctioneer will ask the seller if they wish to lower their price.
Post Auction – What happens?
Once an auction has finished the agent will enter your details onto the contract. In most instances the agent will require an immediate deposit of up to 10% of the purchase price. Once the Contract is signed by all parties it will be forwarded to the relevant parties Solicitor to commence the conveyancing process.
How can we help?
A.L.F. Lawyers are experienced with working with clients who have either bought or sold through the auction process. We can assist you understand the auction process prior to the auction. We can also review the auction contract for you before the auction and advise you on the implications of any special conditions that are required by the seller.
In certain circumstances, we can also prepare your own special conditions that can be submitted to the auctioneer and the seller for approval prior to the auction, that would apply to you specifically if you are the highest bidder of the auction.
We will assist you for the duration of the conveyancing process and ensure that any issues with the property are identified and readily dealt with to provide you with the best outcome.