Auction sales are becoming more and more prevalent in the Brisbane real estate market. If you’re currently on the hunt for your next property purchase, you could easily find yourself falling in love with a home going under the hammer. Here’s what it’s like to purchase at auction and why it’s important to understand your obligations as a buyer before attending your first auction.
There’s no cooling off period
When a property goes up for sale via an auction, it is important to understand what this means for you as the purchaser. Unlike private treaty sales, there is no cooling off period. Settlement happens the minute the hammer falls at an auction. The highest bidder will be the proud new owner of the property once the auctioneer announces that the seller’s reserve has been met and that the property will sell. Should you be the highest bidder when the gavel falls, you will be taken by the auctioneer to sign the contracts immediately and the property settles at midnight that night. What is important to understand is that whatever condition the property is in, you have purchased it unconditionally and there is no backing out.
Why are auctions so popular?
There are a number of reasons auction sales are popular among vendors. If the property is unique or special in some way – an auction can draw out interest from potential purchasers looking to own something different.
Properties located in highly desirable suburbs are also likely to go to auction because they are highly sought after addresses and can create competition among those seeking to live in this precinct.
An auction is also a quick way to sell a property, because of its unconditional nature. Buyers must come prepared with their 10% deposit cheque in hand and the building and pest inspections have been done prior to the auction day, so there is no drawn out process of waiting for bank approval inspections and building and pest or strata reports to be done before a settlement date.
Why should I seek an independent building and pest report?
Some auction properties may come with a building and pest inspection report which the agent is likely to hand to you along with the contract for sale. It is important to realise that this report was more than likely commissioned by the seller of the property or the agent – both of whom want the property to sell for top dollar on auction day. Whilst this could very well be a thorough report – you as the purchaser have no way of knowing what kind of inspection was done, or if the company used to conduct the inspection were reputable.
Seeking your own independent building and pest inspection ensures that you are in the driver’s seat. That the inspector is working for you and you only and that they are in there looking for all of the possible pitfalls that a property could have. They’ll be reporting those back to you so you can have all of the correct information on hand come auction day. If you feel that you are in with a good chance and that this property could be the dream home for you – you can’t put a price on the peace of mind that an independent building and pest inspection can give you.
