Buying a property can be an intimidating process, especially at an auction where you are competing with other buyers and there is no cooling-off period. Many properties are sold at auction, particularly in a rising market, so it is important for buyers to understand the processes involved so they can bid confidently on the auction day.
There are many things that need to be done before the auction to ensure that your interests are protected and that you are fully informed about the property you are intending to buy. The information below is general only; we recommend obtaining professional advice relevant to your circumstances.
Auction Readiness Comparison
| Step | What You Need | Why It Matters |
|---|---|---|
| Contract Review | Conveyancer’s report | Identify hidden costs or unfair terms. |
| Finance | Unconditional approval | You must pay the 10% deposit on the spot. |
| Due Diligence | Pest & Building reports | You buy the property ‘as is’. |
1. Contract Review
The most important thing to do is to take the contract of sale to your conveyancer in Sydney well before the auction date. Your conveyancer will review the contract, explain the provisions, and help protect your interests by identifying terms that might need to be negotiated, such as:
- A longer settlement period
- A reduced deposit (e.g., 5% instead of 10%)
- Additional terms and conditions
If you are the successful bidder, the reviewed contract can be signed with confidence.
2. Inspect the Property
You should obtain pest and building inspection reports, or strata reports if buying in a strata complex. You should be satisfied with these reports before the auction. Thoroughly inspect the property to ensure all inclusions are in working order and utilities (gas, water, electricity) are functioning.
Remember: If you are successful on the auction day, you are buying the property ‘as is’.
3. Research & Finance
Thoroughly research the area and surrounding suburbs so you are comfortable with your maximum bid. Crucially, confirm your unconditional loan approval with your lender. You must have adequate funds available to complete the purchase within the timeframe stipulated in the contract.
4. Deposit & Registration
If you are the successful bidder, you will be required to pay a deposit (usually 10%) via EFT, cheque, or deposit bond immediately. To participate, you must register with the selling agent to receive a bidder’s number. You will need to provide valid ID, such as:
- Driver’s licence or learner’s permit
- Vehicle registration paper
- Council rates notice
5. Bidding Strategy & Reserve Price
The seller will nominate a reserve price, which is usually not advertised. If bidding passes this price, the property is “on the market” and will be sold at the fall of the hammer. Set a maximum price and stick to it. If you feel too emotionally attached, provide written signed authority to an agent or friend to bid on your behalf.
6. Successful Bidder: Next Steps
If you are the highest bidder, you will immediately provide your conveyancer’s contact details, sign the contract, and pay the deposit. You are now in a legally binding contract with no cooling-off period.
Get Expert Auction Advice
The purchase of a property should not be overwhelming. Our expert team at Classic Conveyancing can guide you through the process and ensure your interests are protected. If you are heading to an auction in St Marys or the Western Sydney area, contact us today.
Call our St Marys office on 02 9623 2777 or email co****@***********om.au.
Note: This is general information only. For specific advice, please contact our team.