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sualg

Planning to purchase at auction

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Hi guys,

I’ve been to view a property it’s going to auction in about three weeks. The real estate agent has given me a copy of a draft contract. The question I have is before the auction what steps should I have taken both with the contract and any other measures you feel necessary if I’m planning to bid on the property.

 

The real estate agent has given me a copy of a draft contract. The question I have is before the auction what steps should I have taken both with the contract and any other measures you feel necessary if I’m planning to bid on the property.

 

Obviously this whole process is a bit alien to me, I have found a conveyancing solicitor but haven’t instructed them as yet, any help would be gratefully appreciated.

 

 

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2 hours ago, Skani said:

I believe you are in NSW?   This is the NSW Office of Fair Trading's guide to buying at auction:

https://www.fairtrading.nsw.gov.au/housing-and-property/buying-and-selling-property/buying-a-property/buying-property-at-an-auction

If you do not have PR status I assume you are aware of restrictions and extra costs?

Hi, Yes I am in NSW and have PR. Thanks very much for the link, its very useful. I don't understand this element :-

 

  • the auctioneer is entitled to make one bid only on behalf of the seller

how is it that a auctioneer can make a bid on behalf of the seller, it makes no logical sense?

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It doesn't make much sense to me either but I believe it is used to get the auction moving if there is not much action.  But someone more involved in this real estate lark might be able to elaborate further.

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4 hours ago, sualg said:
  • the auctioneer is entitled to make one bid only on behalf of the seller

how is it that a auctioneer can make a bid on behalf of the seller, it makes no logical sense?

If no one will start the bidding, or if bidding stalls, the auctioneer is allowed to make a fake bid to start the ball rolling.   


Scot by birth, emigrated 1985 | Aussie husband applied UK spouse visa Jan 2015, granted March 2015, moved to UK May 2015 | Returned to Oz June 2016

"The stranger who comes home does not make himself at home but makes home itself strange." -- Rainer Maria Rilke

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8 hours ago, sualg said:

I’ve been to view a property it’s going to auction in about three weeks. The real estate agent has given me a copy of a draft contract. The question I have is before the auction what steps should I have taken both with the contract and any other measures you feel necessary if I’m planning to bid on the property.

Obviously this whole process is a bit alien to me, I have found a conveyancing solicitor but haven’t instructed them as yet, any help would be gratefully appreciated.

When you bid at an auction in NSW, it's binding. You've bought the property and you're bound by that contract - you can't do any negotiations and there's no backing out!   So you need to do all your research before the auction, because it's too late to do it afterwards.   Therefore you need to instruct your conveyancer now, tell them you're going to be bidding at auction and ask them to check the contract and  do all the necessary searches etc. 

I hate auctions for that reason, because you can spend a lot of money on conveyancing for property after property and sometimes you may never get a bid in.   Be aware that the guide price given by the agent is nearly always lower than the price the owner is looking for, sometimes by a large amount - it's supposed to be illegal to underquote in NSW but it's still rampant.

Edited by Marisawright

Scot by birth, emigrated 1985 | Aussie husband applied UK spouse visa Jan 2015, granted March 2015, moved to UK May 2015 | Returned to Oz June 2016

"The stranger who comes home does not make himself at home but makes home itself strange." -- Rainer Maria Rilke

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Go to a couple of auctions before hand just to get familiar with the process. I'd also watch the auction sold prices of comparable properties and compare these to the previously advertised selling range.

Know your bidding limit and be aware of the additional costs such as stamp duty. Have your cheque book ready for the 10% deposit. You can ask the agent prior to the auction if a 5% deposit if acceptable if that suits you better.

Good luck, let us know if you're successful.

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