Home News Are standard disclosure docs adequate bid with confidence at an auction?

Are standard disclosure docs adequate bid with confidence at an auction?

Font size :

Q. Are standard disclosure documents adequate for a person to bid with confidence at a property auction?

A. If there is a time that caveat emptor applies, it’s at an auction.  The buyer must beware!  He is entering into a contract that is sealed with a signature and a cheque at the close of the event, and there is no cooling off period. 

Unfortunately, outside of the ACT, auction sellers are not required to provide a building report, pest inspection or energy report.  And that’s only part of the matter.  There are also other important matters that are either not required to be disclosed or not a part of the requirements to provide a good title in every State.  These need to be addressed in every purchase, but they are a particular problem in an auction.  Significant preparation is in order.

When you go to an auction, you have little idea of the outcome.  So going through a lot of hassle and expense to answer all of these questions isn’t wonderful.  But it’s a necessity if you want to protect yourself.  And, by the way, purchasing in ACT doesn’t solve the problem. While they require the seller to provide a building report, pest inspection and energy report, their disclosure and ‘good title’ requirements in other matters may be lower than those of other States.

What approach should you take when purchasing at auction?  First of all get a copy of the contact and disclosure statement prior to the auction and take it to your solicitor.  Get advice on what other information you should request, and follow through with that request.  Your solicitor may even recommend that you propose amendments to the contract.  As you will be doing that for each property that you will be bidding on, allow for that in how much you bid.  A building, pest and energy report will cost you from $850 to $1,600, and your solicitor isn’t going to work for free. 

Plan to get the property a bit cheaper at auction.  This may mean that you don’t win the bid, but, take heart; many purchases proceed after the auction.  Keep in mind that typically from three days before the auction until the day after the auction there is no cooling off period.

With regard to your deposit, talk with the real estate agent as to what forms of payment and timing of payment are required.

These are practical matters to consider when preparing to go to an auction, but keep in mind that through that whole process, your solicitor is your best friend.  He or she should be depended upon for legal advice.  All of these matters are constantly under review in each State, so make sure your advice is up to date.

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Mortgage News and Articles

To break monopoly, many smaller lenders could become banks To break monopoly, many smaller lenders could become banks

The proposed change could break the Big Four’s monopoly over the mortgage market and help families get cheaper home loan rates Read more

Borrowing against the home: A strategy to pay for aged care Borrowing against the home: A strategy to pay for aged care Such debts can generally be divided into long-term and short-term loans ... Read more

NAB slashes growth forecasts for houses, units NAB slashes growth forecasts for houses, units Numerous factors, including tighter credit rules and the growing supply of new stock, have reined in Australia’s seemingly unstoppable housing market boom ... Read more

Broking industry wants to reform commission structures Broking industry wants to reform commission structures It argues that scrapping commissions altogether would push up the interest rates paid by consumers ... Read more

More mortgage news and articles

Sponsored Links

Friday, Jul 21, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Whether you're a first homebuyer, looking to refinance, or investing, it's important to have the right loan for your needs. Just fill in a few details below and one of our trusted mortgage advisers will contact you.

A quick & easy way to find the right home loan
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords