What to expect on auction day
Make sure you’ve been through the property and have asked the real estate agent any questions about the property and the auction day process. The agent will be seeking an indication on whether you intend to bid on the property, so they can keep an eye out for you in the crowd.
Olivia Parsons is the state manager for legal at Conveyancing.com.au. “Auctions waive the cooling-off period, so all your checks and balances need to be completed before auction day,” she says.
If you’re buying at auction, bid smart, do your homework and mitigate the risks, she states. “If you haven’t arranged a building and pest inspection beforehand, then you’re taking on a property of unknown condition. Best case scenario, it isn’t a problem, but the potential risks are significant,” Parsons says.
Legislation differs in each state or territory concerning buying at auction, so it's best to familiarise yourself with the lay of the land in your state.
An auction can be an exciting way to purchase a property, but it’s crucial you don’t get caught up in any frenzied bidding and spend more than you intended. Make sure you have been to the bank, that you’ve got your finances lined up and that you have a very clear highest price in mind. Don’t go over that price no matter what.
Parsons warns that "bidding over budget is not only dangerous but could be disastrous. If you commit to a sale beyond your pre-approved amount from the bank, there are no guarantees they will increase your loan.”
Also, if the contract isn’t subject to finance and you don’t have the money, you can still be obligated to purchase. “This means at a minimum you’ll pay the deposit amount, but you could also be liable for any loss the seller experiences on resale of the property,” Parsons adds.