Buying at Auction

It is important to be aware of your rights and responsibilities when considering buying a residential or rural property at auction. Real estate agents are required to give all auction bidders a copy of the Bidder’s Guide prior to the auction commencing.

The Bidder’s Guide is published by NSW Fair Trading.

The vendor of the property will provide the auctioneer with the reserve price of which the intended buyers would generally be unaware. The reserve price is the lowest price that the vendor is willing to accept. If the highest bidder is below this price, the property will be “passed in”. The vendor then attempts to negotiate a price with interested bidders or either withdraw the property from the market or, alternatively, put the property back on the market.

The property will be sold in the event that the bidding continues beyond the reserve price. The successful buyers are required to sign the sale contract and to pay the deposit immediately after the fall of the auctioneer’s hammer. There is no cooling-off period when you buy at auction or exchange contracts on the same day as the auction after it is passed in.

It is for that reason, it is important to have:

a solicitor examines the sale contract before the auction takes place to make sure everything is in order

that you have your finance arranged

that pre-purchase building/pest and, if appropriate, strata report have been obtained prior to the auction.

Call us on (02) 9199 0737 or send an email to cjm@cmalegal.com.au for assistance.