With Sydney property prices rising strongly in response to pent-up demand and low interest rates, the popularity of auctions has also returned. Buying at auction can be stressful and the atmosphere can be intense. So, be prepared! Here are some quick tips from our conveyancing experts in North Sydney to help you buy with confidence.
- Our #1 conveyancing tip is see how it’s done – you should attend at least half a dozen auctions prior to the “auction day” so that you are familiar with the jargon and the process.
- Understand your borrowing power – obtain pre-approval for your finance so you know your bidding limit.
- ‘Walk away’ price – Don’t get carried away and don’t let your emotions do the bidding. Research recent sales in the area and set yourself a realistic maximum purchase price, then stick with it!
- Deposit – if you are the successful bidder at auction you will need to provide the agent with the deposit cheque (usually 10% of the purchase price) at the time contracts are signed following auction.
- No Cooling-off – properties sold at auction are not subject to a cooling-off period. Once the hammer goes down and you are the successful bidder, the Contract for Sale will be unconditionally binding on you and the vendor until completion of the transaction.
- Property enquiries – Be sure to get pre-purchase property inspection reports from a qualified inspector. Relevant reports such as a building and/or pest report will provide you with valuable information concerning the condition of the property. You should also contact your local council to see whether there are any proposed developments in the area that may affect your future use and enjoyment, speak to our senior conveyancing Solicitor about this.
- Registration – If you intend on bidding at auction you must give the agent your name, address and proof of ID so that the agent can register you in the Bidders Record. You can register with the selling agent any time prior to auction. If you do not register with the agent, you will not be able to bid – conversely, registering does not mean that you have to bid.
- Contract review – It is important that you get a Lawyer to review the Contract for Sale to ensure that the terms protect your interests. Any changes to the contracts must be sought prior to auction as once the hammer goes down the terms in the contract will be binding. Commonly requested changes are extended settlement periods, 5% deposits and reduced penalty interest rates for delays in settlement.
- Whose name are you purchasing in? – You should always consult your accountant to discuss the structure, benefits and implications of the transaction. Putting the property in the wrong name can cause problems as it is not simply changing the name on the contract. It may lead to tax implications or even double stamp duty when changing the name to the correct party.