05 Dec Buying Property at Auction
Many houses and apartments in Sydney, particularly those in the inner suburbs, are sold by auction.
The marketing campaigns in the lead-up to these auctions can be as short as 3 weeks and are rarely longer than 4 weeks. So when you’re looking to buy, it’s important that you’re right on top of the market (or have your buyers agents working for you!).
The real estate sales agents will give price guides (if you ask for them!) and are legally obliged to give their true estimate of the price range at which the property is likely to sell.
You can make an offer before the auction but be prepared to move quickly and do your homework first (or have your property consultants do it all for you).
All Sydney property auctions require a bidders’ register. Everyone who’s bidding at auction must register with the selling agents (providing name, address and proof of identification) and must be given a bidding number. The auctioneer will not accept bids from anyone without a number.
Vendors are allowed to have one bid made on their behalf and the auctioneer must announce that it is the vendors’ bid.
Vendors set a reserve price before the auction and must give it in writing to the auctioneer. (It is not disclosed to bidders.) This is the lowest price the vendor is willing to accept at the auction and if bidding doesn’t reach that level, the property may be “passed-in”. The vendor is not obliged to sell the property for less than the reserve price.
The auctioneer is not obliged to accept any bid he/she doesn’t believe is in the vendors’ best interests.
The auctioneer is not obliged to announce when the reserve price has been reached or to announce when he/she is going to ‘bring down the hammer’ and sell the property.
The highest bidder is the buyer (subject to the reserve price having been reached) and must sign the Contract of Sale immediately after the auction and pay a deposit (usually 10% of the purchase price).
There is no cooling-off period on sale by auction and the highest bidder is obliged to complete the purchase.