Deposit amount required at auction?

How much do you need to sign over as deposit if succesful at a n auction? I cant see anywhere in the terms of contract the much quoted '10%', and anyway-at an auction the contract is binding so a deposit is a token gesture anyway?

Reason is I would much rather just give say $1k rather than 10% and cant see why I shouldnt be allowed?
 
Hiya

The deposit is negotiable b4 auction usually.

1 k doesnt provide a lot of hurt money if you default so be dont be surprised if they wont buy that, especially in the current Melb market

ta
rolf
 
O.k, what about if you are using equity in an existing property to buy another? You may not have the 10% available, or if you do you may not want it used/tied up sitting with the vendor? How do people get around this one? Basically-you read stories of people using increasing equity to buy aditional properties, but how do they come up with the deposit?
 
On the topic of Auction Deposits, I assume that people aren't going to these auctions with a suitcase full of money. Is it just a mater of having a bank cheque drawn up, payable to the agents trust beforehand?
 
How much do you need to sign over as deposit if succesful at a n auction? I cant see anywhere in the terms of contract the much quoted '10%', and anyway-at an auction the contract is binding so a deposit is a token gesture anyway?

Reason is I would much rather just give say $1k rather than 10% and cant see why I shouldnt be allowed?
Just have a read of the contract prior to the auction it will be in the terms and conditions, most are unconditional contracts,and most want 10% at the fall of the hammer i know i would,i know you could hold the property for 24 hours with 1 k that way -but they would want the 10%within the next working day from my experience..imho willair..
 
Is it just a mater of having a bank cheque drawn up, payable to the agents trust beforehand?

No need for a bank cheque - personal cheque is fine. If you need a few days to clear funds, just tell the agent not to cash it until xxxday.

Cheers,

The Y-man
 
Just have a read of the contract prior to the auction it will be in the terms and conditions, most are unconditional contracts,and most want 10% at the fall of the hammer i know i would,i know you could hold the property for 24 hours with 1 k that way -but they would want the 10%within the next working day from my experience..imho willair..

But thats the thing Im getting confused about-I couldnt just walk away even if I wanted to could I? Isnt it a legally binding contract with no cooling off period, thus he could sue me etc to ensure the sale went through?
 
But thats the thing Im getting confused about-I couldnt just walk away even if I wanted to could I? Isnt it a legally binding contract with no cooling off period, thus he could sue me etc to ensure the sale went through?

You could..... just as with any other type of sale .... fail to settle. If you have only put down 1k, then there is a much higher risk with respect to trying to recover costs etc from you.


Cheers,

The Y-man
 
You could..... just as with any other type of sale .... fail to settle. If you have only put down 1k, then there is a much higher risk with respect to trying to recover costs etc from you.

Cheers,

The Y-man

I wouldn't be advocating that (sign- default and let them try to sue you for the money????
You are singing a legally binding contract with monetary consequences. EG 10% interest until you settle plus they will try to recoup auction costs etc if you don't settle. Why get into a litigation match.


If you get a bad credit rating by defaulting on a contract that's the end of you expanding your portfolio.
If you haven't negotiated less deposit and you don't have 10% don't bid.
 
Top