Preparing for Auction Day

An auction is a public sale where potential buyers gather to bid for the property On the day of the auction, the sellers (vendors) must set a reserve price. Once the price has been met or exceeded the reserve price and there are no more bids, the auctioneer announces that the property is sold to the highest bidder.

Start with your finances

There is no cooling-off period in NSW if you buy a property at auction. This means that if you’re the highest bidder on the day, once the hammer falls, a contract is immediately binding and enforceable. That’s why you must ensure your finances are in order before you head to auction day. 

Here’s what you’ll need:

• Your deposit (generally 10% of the purchase price) ready to go.
• Your written home loan approval from your lender. We recommend ensuring that your approval is either ‘unconditional’ or is a ‘pre-approval’ with conditions capable of being met shortly after the auction day.
• Don’t forget to tell your bank or broker you intend to bid at the auction so they can guide you appropriately.
• If the property is sold to you on auction day and you can’t pay the balance of the purchase price at the time of settlement, the 10% deposit will be forfeited to the vendor.

Contact your solicitor or conveyancer

The earlier you contact your Conveyancer or Solicitor, the better! They’ll undertake all the necessary title and property searches and conduct a pre-purchase review of the sale contract to ensure there are no surprises if you’re the lucky buyer on the day.

Inspect the property

You should attend as many inspections of the property as possible before it is sold at auction.

Organise building and pest

Just because you’re buying a property at auction doesn’t mean you should skip a building

and pest inspection. You’ll want to ensure the property is in good condition. 

Familiarise yourself with the auction process

Going to a house auction can be intimidating and overwhelming. Be prepared for what’s to come by understanding how auction day will unfold. 

For more information on the auction or bidding process, visit the Fair Trading NSW website. If you’re looking to buy a property at auction, engage a conveyancer early. Here at Equilaw Solicitors, we want to ensure everything goes smoothly before and on the auction day. Call us on 02 6542 5566.

Liability limited by a scheme approved under Professional Standards Legislation. This newsletter is intended to provide general information. You should obtain professional advice before you undertake any course of action.