Your Questions Answered

Congratulations on buying your dream home at auction! However, the process doesn’t end there. Here are some steps you need to take after winning the auction:

1. Firstly, and most importantly, be aware that if you’re the successful bidder, you’re legally bound to buy the house unconditionally. There is no backing out!

2. Sign the sale and purchase agreement: You will be asked to sign the sale and purchase agreement as soon as the auction is over. If you are bidding by phone or online then the auctioneer may be able to sign the sale and purchase agreement on your behalf, if this is stated in the auction conditions.

3. Pay the purchase deposit: You will be required to pay 10% (unless other arrangements have been made with the seller) of the purchase price as a deposit, either by bank cheque or personal cheque or more usually these days, by direct transfer to the agent’s trust account. The deposit will be held in the trust account for ten working days before being released to the seller, less the agent’s commission. Complete the purchase: Auctions are final, so the successful bidder is legally required to complete the purchase.

4. You will now have to wait until settlement day. This is the day shown on the contract when you will be required to pay the balance of the purchase price, and this is the day that you legally take possession of the property. During this time you should organise your insurance and arrange for movers etc.

5. Pre-settlement Inspection:A short time before the settlement date, usually 2-3 days, you have the right to a pre-settlement inspection. We’ve written about this before: All it means is that if there is anything broken or damaged that was fine when you first inspected (e.g. at the open home), you can require the sellers to fix it, or pay compensation.

6. Take possession of the property: Once settlement day arrives, you can take possession of the property, move in and enjoy!