Auctions are a common method of sale in Melbourne’s competitive property market. If you’re bidding at auction for the first time, here’s what you need to know to be prepared.
There’s No Cooling-Off Period
This is the most critical difference from a private sale. When you’re the winning bidder at auction, you sign the contract immediately and there is no cooling-off period. This means you’re legally bound from the moment the hammer falls. Make sure all your due diligence is complete before you bid.
Conduct Due Diligence Before Auction Day
Because there’s no cooling-off period, everything must be in order before you bid:
- Have your conveyancer review the Section 32 and contract of sale
- Commission a building and pest inspection
- Have unconditional (or at least pre-approved) finance in place
- Check for any special conditions in the contract
Negotiate the Contract Before the Auction
Many buyers don’t realise you can negotiate contract terms before an auction. If there are clauses you’re unhappy with, your conveyancer can request amendments from the vendor prior to the auction date. Any agreed changes should be made in writing on the contract.
The 10% Deposit is Due on the Day
When you win at auction, you’ll typically be required to pay a 10% deposit on the spot. Ensure you have bank cheques ready — or confirm with the agent whether electronic transfer is accepted.
What Happens After the Auction?
Once contracts are exchanged, your conveyancer takes over and manages the process through to settlement. The timeline and process are the same as a private treaty sale from this point.
Let FC Conveyancing Prepare You
Going into an auction prepared means having your legal review done in advance. Contact FC Conveyancing for a pre-auction Section 32 and contract review — we can turn it around quickly.