Buying Property at Auction

Auctions are not as common in Queensland as they are in other states of Australia

Real Estate Auctions

Buying Property at Auction is not something most people do every day. An auction may be held either at the property, at the real estate agency or in rooms at a hotel. You will be given a chance to inspect the property usually at an open day or two before the auction or by arrangement.

Auctions are different in all states so you should contact the First National Real Estate agent in the area you wish to purchase. They can advise you on how best to proceed.

Before you attend, contact your lender. It is advisable to let them know that your search has been successful and you have chosen a property you wish to buy at auction.

All things in order, you will have obtained a Pre-approval Certificate which is an indication of how much money you will be able to borrow.

Arranging this form of preliminary financing is very important as it demonstrates your ability to repay a home loan and your sincerity to purchase.

What should you do at an auction?

Prior to the auction, it is advisable you should always have your solicitor check the terms and conditions of the Contract of Sale of Real Estate.

In Queensland you must receive a copy of a disclosure statement for units, townhouses or duplex’s prior to being a successful purchaser of the property.

It is a good idea to attend an auction or two before bidding yourself.

The most. important thing to keep in mind at an auction is your financial limit. Keep a cool head and bid for the property, not just against another bidder. Once you have made a bid, it cannot be withdrawn.

What do you do when your bid is successful?

When your bid is successful, you will be required to pay the deposit (usually 10% of the purchase price) immediately.

There are a number of ways you can have the money ready but confirm with the agent or auctioneer beforehand on what is approved :

  1. cash, which can be very risky
  2. personal cheque with adequate identification
  3. bank cheque

Immediately after the bidding, contracts are signed and the deposit is paid. There is no cooling off period. You are committed to buy.

There are occasions when the bidding does not reach the owner’s ‘Reserve Price’ and the house is not sold. The house is then considered to be ‘passed in’. If the house is passed in, the highest bidder usually has first opportunity to negotiate with the seller and the agent.

The deposit monies must, by law, be banked into an official trust account on the day they are received or by no later than the next business banking day. Any interest paid on an Estate Agent’s trust account by the bank is paid directly to the Receiver of Public Monies on behalf of the State Government. Absolutely no interest or benefits are received by the agent who operates the trust account into which the deposit monies are paid.

Congratulations, you now own the home of your dreams!

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