Buying a property at auction is different to buying a property by way of private treaty.
The bidding process is public and once the metaphorical hammer falls at the auction, if you are the highest bidder, you are required to proceed to sign a Contract for Sale. The auctioneer will proceed to effect an exchange of Contracts on that day.
Importantly, there is no cooling-off period when property is sold at auction.
If a property is “passed in” at auction because the highest bid does not meet the vendor’s reserve price, the property is withdrawn from auction and the highest bidder has a right to negotiate with the vendor. If agreement is reached as to the sale price during this negotiation period following the auction on the same day as the property was offered for sale by auction and the parties proceed to exchange Contracts, there is still no cooling-off period available to the purchaser.
On the other hand, if you negotiate a sale by private treaty and submit the highest offer which is accepted by the vendor, if you proceed to sign a Contract for Sale and an exchange is effected, by law you have a 5 business day cooling off period. This right is provided for under section 66S of the Conveyancing Act 1919 (NSW) (Act). You may elect to waive your cooling off rights by arranging for your solicitor or licensed conveyancer to sign a certificate under section 66W of the Act.
Accordingly, it is important that you have your solicitor or conveyancer review the terms of the Contract for Sale before the auction as there will not be any opportunity following the fall of the hammer to negotiate the terms of the Contract. Your solicitor or conveyancer will be able to request amendments to the Contract before the auction to ensure that the terms of the Contract are satisfactory to you.
You’ll find that the team at Conditsis Lawyers is here to demystify the conveyancing process.
