Buying at Auction

[WillG]

I understand how to buy at Auction and that a 10% deposit is payable immediately after the auction but what happens afterwards?.

Is the completion date negotiable? What happens is you cannot pay the remaining 90% by the completion date?

When is stamp duty payable? Is it on completion of the contract?

What happens if the bank changes it mind(after a pre approval) and the contract cannot be completed in time?

I have not purchased at an auction and are concerned about the extra risk taken on by the buyer if finances cannot be finalised by the completion date. Does anybody have advice on how to reduce the risks?

Thanks

 

[Propertunity]

WillG, I can only answer as though it were NSW but I imagine it is pretty much similar in the ACT

I understand how to buy at Auction and that a 10% deposit is payable immediately after the auction but what happens afterwards?

It proceeds to settlement as any normal contract. On the day of auction, the contracts are exchanged - no cooling off period applies.

Is the completion date negotiable?

Not on the auction day! But if you can negotiate a different completion date, in the event that you are the successful bidder, fine - but it must be done before auction day.

What happens is you cannot pay the remaining 90% by the completion date?

All sorts of nasties. Penalty interest normally kicks in and if you do not ever settle they can sue as per normal for the extra costs of finding another buyer and the difference between what you signed off on and the eventual seller signs off on (if lower).

When is stamp duty payable?

Usually within 30 days of contract signing.

Is it on completion of the contract?

Could be if settlement was 30 days I have settled and paid stamp duty on the same day a couple of times.

What happens if the bank changes it mind(after a pre approval) and the contract cannot be completed in time?

You're screwed ...... Nah not really - but you do need to make plans to get finance - and quickly.

I have not purchased at an auction and are concerned about the extra risk taken on by the buyer if finances cannot be finalised by the completion date. Does anybody have advice on how to reduce the risks?

You need to get P&B reports done prior. You need the bank valuer to give you a price they will lend on if you are the successful bidder on the day.

 

[Jacque]

I understand how to buy at Auction and that a 10% deposit is payable immediately after the auction but what happens afterwards?.

Is the completion date negotiable? What happens is you cannot pay the remaining 90% by the completion date?

When is stamp duty payable? Is it on completion of the contract?

What happens if the bank changes it mind(after a pre approval) and the contract cannot be completed in time?

I have not purchased at an auction and are concerned about the extra risk taken on by the buyer if finances cannot be finalised by the completion date. Does anybody have advice on how to reduce the risks?

Thanks

Hi Will

Alan's pretty much covered it in his reply above but first stop is your broker or lender who can ascertain your budget and go from there.
Get any changes amended to the contract BEFORE the auction from your conveyancer or solicitor and these can include the negotiation of a lower deposit and longer settlement terms, if these suit your situation.
Best of luck with it all.

 

[HappyCamper]

Can I just ask - what are the common ways of paying the deposit and how much is typically put down on the actual day of the auction?

 

[Jacque]

Can I just ask - what are the common ways of paying the deposit and how much is typically put down on the actual day of the auction?

Personal cheque, bank cheque, deposit bond or by DFT the following day (as agreed to beforehand with the vendor via their agent or solicitor).
10% is usually required, though if you seek a smaller deposit beforehand some vendors will accept this.

 

[willair]

I understand how to buy at Auction and that a 10% deposit is payable immediately after the auction but what happens afterwards?.

Is the completion date negotiable? What happens is you cannot pay the remaining 90% by the completion date?

When is stamp duty payable? Is it on completion of the contract?

What happens if the bank changes it mind(after a pre approval) and the contract cannot be completed in time?

I have not purchased at an auction and are concerned about the extra risk taken on by the buyer if finances cannot be finalised by the completion date. Does anybody have advice on how to reduce the risks?


Thanks

All prospective bidders are required to register their name and address with the auctioneer prior to bidding. Satisfactory evidence of identity must be provided. All registered bidders will be issued with a numbered bidder’s card. No bid will be accepted from any unregistered bidder.
2. The highest approved and acknowledged bidder shall purchase subject to reserve and bidders are responsible for the recognition of their alleged bids.
3. Where in respect of any lot to be offered for sale Transmission by Death in favour of the Vendor has not been registered on the relative title by the Registrar of Titles as at the date hereof, such sale is conditional upon such transmission.
4. Terms shall be strictly cash and the Purchaser shall pay an immediate deposit of 5% of the purchase price and contract to pay the balance of the purchase price within 42 days from the date hereof, except that in any sale which is subject to the registration of Transmission by Death in favour of the Vendor, such balance of the purchase price shall be paid within 30 days following notification in writing by the Vendor to the Purchaser of the registration of such Transmission by death or within 42 days from the date hereof whichever is the later.
5. The Auctioneer shall determine any dispute absolutely and his decision shall be final and binding. He may resubmit any lot at his discretion to resolve any error, dispute or default.
6. No bidder shall advance less than the sum named by the auctioneer.
7. No bid shall be retracted and the auctioneer may refuse any bid.

This is the way it works in QLD..willair..