Beware of Potential Pitfalls at Auction
There is an increasing number of property’s been sold under the hammer in South East Queensland, with a growing auction market. Before you start bidding there are a few essential differences to be aware of between purchasing a property by a standard inspection process and one at auction.
- Be sure
Purchasing a property at auction means that there is no standard cooling off period. A cooling off period is five business days after the date of the Contract where a buyer may terminate the contract. There may be a penalty imposed of 0.25% of the purchase price, this is a small price to pay should the property not meet your needs. Placing a Contract on a property at auction, you automatically waive your right to a cooling off period, so it is essential that you have researched the property and surrounding area and are sure it’s the one for you.
A Contract placed on a property at auction is automatically unconditional. Meaning, that the contract is not conditional upon building and pest inspections, finance or subject to the sale of an existing property. The need to organise finance approval prior to bidding is imperative, as you may be required to pay the respective deposit on the day. Ask the agent for a copy of the contract and review all standard terms and conditions prior to the auction day, so you are aware of what obligations and rights you have throughout the conveyancing process and what to expect from the Vendor. As part of Mott & Associates, Solicitors fixed fixed fee for purchasing residential property (contact our firm for conditions that apply), we offer a complementary review of the Contract prior to your signing same.
- Inspect the property prior
As the Contract will be unconditional, it is important that you carry out respective inspections prior to the auction day. Arrange with the agent, with the Vendors consent, to have building and pest inspections carried out well in advance, to identify and issues that may arise. These inspections are at the buyer’s expense in Queensland. Obtain copies of these respective reports and raise any queries with licenced professionals to gauge any works or repairs the property may require in due course, as after the contract is signed, these will be at your expense.
If you have a contract you wish for us to review or require assistance in the conveyance of your transaction, we invite you to contact our conveyancing team for further discussions. We offer competitive fixed fee costs (contact our firm for conditions that apply) in relation to standard residential conveyancing matters.