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Precautions for auction buyers

Buying your home at an auction can be both exciting and stressful. Aside from knowing your budget (and not bidding over it), you should also be aware that one of the most important differences between buying your home by private treaty and buying it at an auction is the 'cooling off' period.

No cooling off period

By law, buying your home by private treaty normally entitles you to a 'cooling off' period. During the cooling off period, you can change your mind about going ahead with the contract and cancel it even though you have already signed it and paid a deposit. If you cancel it properly during the 'cooling off' period, you may only lose a small part of your deposit. On the other hand, there is no cooling off period if you buy your home at an auction. This means that you may be breaching the contract if you change your mind and decide to cancel it. The likely consequences of breaching the contract are losing all of your deposit and having to compensate the seller for other costs or financial losses.

If you are intending to buy your home at an auction without the benefit of a cooling off period, you should consider taking a number of preliminary precautions even before you start bidding. Some basic points to consider are

• attend other auctions to become familiar with the auction process
• research the property market in the local and surrounding areas
• inspect the property personally or professionally (depending on the issues of concern)
• obtain finance pre-approval and ensure you have sufficient funds for the deposit
• confirm the auction time and prepare your personal identification for registration

From a legal perspective, if you are the winning bidder at the auction, you must the sign the contract and pay the deposit immediately. It also means that you accept the contract and all of its terms and conditions, regardless of whether you are aware or understand those terms and conditions. Preparing for the auction by informing yourself is as simple as asking the real estate agent for a copy of the contract so that you can obtain advice from your lawyer BEFORE you attend the auction.

What should you do?

At PHANG LEGAL, our experienced property lawyers are able to put your mind at ease and guide you through the conveyancing process in a way that is easy to understand. If you require competitive fixed fee conveyancing services, including advice before you attend an auction, then you must call us on +61 2 9687 8885 to discuss how we can best assist you or visit our website at www.phanglegal.com.au for more information regarding our practice.

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Ern Phang
Solicitor & Public Notary

PHANG LEGAL
www.phanglegal.com.au

About Phang Legal

Phang Legal is a progressive and dynamic law firm offering a different attitude to the practice of law and a different approach to the delivery of legal services. The firm continues to honour the traditions and standards of the legal profession, while remaining current and relevant to ever changing client requirements and expectations. Phang Legal provides cost effective and practical solutions across a wide range of practice areas including conveyancing and property law, corporate and commercial law, litigation and dispute resolution, wills and estates (elders law), legal aid and criminal law, and notary public services.

6/83 George Street, Parramatta NSW 2150 AU
PO Box 1375, Parramatta NSW 2124 AU
Telephone: +61 2 9687 8885
Facsimile: +61 2 9687 8883
Web: www.phanglegal.com.au