The Gold Coast is abuzz with start of year auction activity, launching this weekend. While there will be many bargains to be had, it is important that common sense and caution are still applied to purchases at auction.
While purchasing residential property at an auction is a common way for property to be purchased in Queensland, it is extremely important that you are fully aware of the auction process, your rights and obligations before signing on that dotted line.
Many people are unaware that if a property is purchased at an auction, then no ‘cooling off’ period is applicable (a statutory timeframe which allows buyers to ‘change their mind’ about purchasing the property), and there will be no finance, building and pest or other conditions applicable to the contract unless they were negotiated and inserted into the contract prior to the successful bid at auction.
Essentially what this means is that if you are the successful bidder at auction, you are contractually bound to purchase the property regardless of whether you change your mind, are unable to obtain finance or discover building or pest issues at the property.
It is also important to be aware that your personal situation can change dramatically when you least expect it and this must be taken into consideration when bidding at auction. For example, a low valuation of the property undertaken by your bank may affect your finance pre-approval or approval, leaving you without funding to complete the contract. Likewise, if you have specific ideas/plans for the property after settlement and then discover once you have conducted relevant searches that you are unable to carry out those plans, there may be little that you can do and you are stuck with an unsuitable property.
Generally, if you are seriously considering bidding on a property at auction, we would recommend that you obtain a copy of the proposed contract and organise for one of our friendly solicitors to go through the contract with you before the auction. We would also recommend that some basic searches be ordered a sufficient amount of time before the auction to ensure that the results are received and the effects explained to you before bidding.
If you have any further queries regarding purchasing a property at auction, our experienced Gold Coast property lawyers are more than happy to assist you, so please contact our office today on 07 5563 8970 to discuss your individual queries.