buying at auction

[dags]

howdy,

have a query in regards to buying at auction and the deposit that you need to secure the deal.

If a 10% deposit is paid to the seller, how is the deposit then arranged with the financier for the principal amount?
Do you have to pay 10%?

(We are first home buyers by the way, so this process is new to us)
I have been researching the auction process but this is a grey area for me.

all replies welcome

 

[Twitch]

The 10% deposit is paid to the agents trust fund and must be banked next business day by the agent.

Beware, buying at auction (and 3 days either side for that matter) is an unconditional contract.

On settlement day, the bank will come up with 80%, and you need to come up with the 10% plus costs (stamp, solicitors fees etc).

In Victoria at least, during the settlement period the vendor may apply (via their solicitor) for early access to the 10% sitting in the agents trust fund. The purchaser has the option to allow or refuse this request.

 

[Bargain Hunter]

Do you have to pay 10%?

Dags,

You can approach the seller with any changes to the contract before auction. You would need to get written agreement prior to bidding. This applies to the deposit, settlement period, early access, fixtures, fittings, whatever.

Just allow time for the changes to be made, keeping in mind they do not have to agree to any of them...

Regards

Andrew

 

[Jacque]

Hi Dags
You need to arrange finance before the auction and, depending on what type of loan you're getting, can borrow up to 100% of the purchase price.
At the auction, if you don't have enough in a chequeing account for what you think 10% will be (or what you're prepared to pay ) then you will need to arrange for a bank cheque.

David Morrell from Melb has written an excellent book on the buying process, which includes a large section on auctions, called "Real Estate Myths Exploded". Well worth the read, and probably available at your local library.

Good luck!

 

[dags]

thanks ppl,
unfortunately buying in melbourne auctions are pretty much unavoidable.
i have read "real estate myths exploded" and thats a great read as well.
thanks again

dags