Buying Property At Auction In Nsw 101}

Submitted by: Symon Ramirez

If you are thinking about buying property at auction in NSW, there are a few things you need to know before you even attend the actual event.

It is not recommended to just show up and not know anything about the auction process because you could make a vital mistake in bidding that you cannot take back.

Below are important things to remember before you head out to an auction:

1. No Cooling Off Period

When you purchase a property through an auction in NSW, there is no cooling off period. Meaning, unlike a traditional property buying experience where you can change your mind before the deal closes, at an auction, there is no taking back your bid when you buy the property. If you are the highest bidder on a property when the gavel comes down, that means that you are bound to go through with the property purchase, no matter how unfair the propertys contract might be. Also, you will not be able to later change your mind about the property because of any unforeseen circumstances.

2. Have Your Solicitor Look Over The Contract Before You Bid

Before even thinking of going to an auction, you should provide a copy of the contract to your solicitor to review and go over all the terms and conditions. Your solicitor will be able to point out any terms that may be in your favour and will negotiate any terms that are not in your favour with the vendors solicitor and request changes to the contract. Your solicitor will also be able to make sure that you buy exactly what you wanted and that everything looks right for when you bid on it at auction. This should all be done before the auction day.

3. Research The Property Before The Auction

Because there is no a cooling off period, a buyer needs to conduct all their research on the property before the auction day. Research that should be conducted before the auction includes:

Physically inspecting the property

Talking to neighbours about the property and the neighbourhood

Research on the area

Obtain a valuation of the property from a licensed value

Obtain any building/pest and any strata reports on the property if applicable

Take photos of the property they wish to bid on to provide evidence just in case any pre-settlement claim for damages comes up

4. Visit Other Auctions Before You Attend The One You Expect To Bid At

If you have never been to an auction before, visit a few other ones before you attend the one that features the property you have your eye on to get a feel and familiarise yourself with the entire auction process. You will not be as nervous or anxious and are less likely to make a mistake at the auction you plan on bidding at.

5. Make Sure Your Finances Are Ready

An important (and obvious) thing to remember before buying property at auction in NSW is simply to make sure that you have enough money to pay for the property you are bidding on, or otherwise, that you have an unconditional loan approval that covers the final purchase price.

If you are successful at auction and later discover that you cannot settle due to insufficient funds, you may likely lose your hefty deposit, have to pay interest and may also be sued for additional damages.

6. Plan To Bring At Least 10% To The Auction

Buyers will generally need have 10% of the auction price to pay upfront when they sign the sale contract. This deposit must be paid before you leave the auction, so it is important that buyers come up with these funds before bidding on desired property.

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About the Author: Unified Conveyancing Sydney

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