Auctions are becoming more widespread and common. Whether you are purchasing or selling at an auction it is important to know how the process operates and how it may impact upon you going forward. In order to place a bid you must provide your details to the selling agent so that they can be entered into the Bidders Record and in return a bidder’s number will be assigned to you. You must also register if you are bidding on behalf of someone else (with an appropriate letter of authority) and for a company (with an appropriate letter of authority). The critical aspect of any auction is that there is no cooling off period, the successful bidder is bound into the contract as soon as it is singed. As such, it is important to consider in brief each parties contribution to the auction process.
As the purchaser you need to have secured a written and unconditional pre-approved finance prior to the auction date. Prior to placing a bid at an auction it is as the contract becomes binding as soon as it is singed, and lacks the cooling off period, you will need to be aware as to how you will be paying the deposit upon exchange as well as what percentage of the purchase price will be required as a deposit. Ordinarily, a 10% deposit is required, although this may be negotiated and approved in writing by the Vendor’s Solicitor. As the purchaser you are required to have secured a written and unconditional finance approval.
Further, there are several aspects that you will need to consider and satisfy yourself prior to signing the contract:
As part of our services to you we are dedicated to help you to understand and negotiate the special conditions of the contract. Part of our contract review process is to provide you with detailed feedback prior to the auction date and if it is required negotiate any aspects of the contract with the Vendor’s Solicitors.
As per an ordinary sale the contract for sale must be prepared prior to the marketing of the property. Keeping in mind that there is no cooling off period you will note that the potential bidders will wish to complete their due diligence prior to the auction. These include but are not limited to property inspections, finance approvals, contract review and amendments before attending the auction. For your peace of mind we prepare for the auction in advance. It is encouraged that all potential bidders obtain the contract and contact us if they have any queries. As part of our services to you we are dedicated to help you from drafting the contract, explaining the entire process to you, keeping you informed along the way. Open Door Legal is here to help you understand the process and to negotiate on your behalf the special conditions of the contract and to make the process as painless as possible.
