The procedure of purchasing at auction is very different to purchasing through a negotiated sale.
If you are the successful bidder at an auction, you will be required to sign the contract and pay the deposit on the purchase price as soon as the hammer falls. As soon as the contract is signed, you are bound to complete the purchase. There is no cooling off period in an auction purchase, so, if you change your mind after signing the contract, there is no easy way out of the purchase.
If you are considering purchasing a property at auction then it is essential that you obtain a copy of the contract from the real estate agent some time before the auction. If you don’t understand the effect of the contract, take it to a solicitor and have them explain it to you.
The contract will reveal crucial characteristics about the property, like its zoning, any restrictions on its use, the rights of any other people to use or occupy parts of the land and the location of services, like sewer lines.
If the land has a building on it, you will also want to consider obtaining pest and building reports prior to the auction. Many purchasers have had their initial joy at purchasing at auction quickly subside at the subsequent discovery of termites in the building. Their rights to be released from the contract, or to seek any compensation for the pest infestation, in the circumstances, are very limited.
If you need to borrow money to purchase the subject property, then this too will need to be organised well before the auction. It is very unwise to head to an auction without final written approval from your lender, because if the finance falls through prior to settlement, you risk forfeiting your deposit to the vendor.
If you need some help with the purchase of property, contact us at Everingham Solomons because Helping You is Our Business.
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