Preparing for auction day

UNLIKE private sales that enable buyers to add conditions to a contract, auctions require every buyer to conduct their due diligence before bidding at auction.

Buyers must ensure that any pre-auction variations to the contract (including payment terms and deposit size) are agreed to prior to the auction and within a solicitor’s office time frame.

Deposits outside of standard settlement dates, conditions which are either added or struck, and payment types other than cheques, all need to be cross-checked and approved before the auction day.

Only once the due diligence is completed is a buyer ready to bid. The likely selling price is an essential consideration and setting a reasonable and competitive limit is the challenge.

Drawing on the comparable sales analysis findings will help in setting a limit.

Asking the agents about the level of competing buyer interest can offer vital insight that most buyers miss simply by not asking the right questions.

Here’s a handy checklist:

Finance approval, and not just an online or over-the-phone approval, but a full credit assessed pre-approval with a real person.

Assessment of likely selling price based on comparable sales analysis – a collation of recently sold, closely located, similarly sized and styled properties – in order to be confident that the preferred budget is aligned with the comparable sales.

Agreement of acceptable conditions: the agent must be able to confirm that the buyer’s deposit size, date of payment, settlement date and any required conditions match the seller’s acceptable terms.

Contract review: the buyer’s legal representative’s review of the contract must not reveal any findings that suggest the property is not what it seems – or show up potentially costly issues or risks.

Building and pest inspection: be certain that nothing from this inspection reveals any concerning issues.

— realestate.com.au