In addition to the practical considerations set out on their
page it is also imperative that you understand that if you are the
successful bidder at auction you are bound to sign the contract and
pay the deposit. Once you have been the successful bidder at
auction you are bound to the contract that has been presented by
the vendor, and it is too late to make variations to the contract
at that point.
It is also too late to do most of your due diligence on the
property after the auction.
Once you are bound to the contract you cannot get out of the
purchase simply because you cannot obtain the finance to complete
the purchase. If you do not pay the rest of the purchase price at
settlement the vendor can generally forfeit the deposit, and may
sue you for any shortfall they suffer on on-selling the property to
someone else, as well as for their costs of doing so.
If is therefore critical that you make sure that you attend the
auction prepared, having taken the following steps:
Have the contract reviewed so you are aware of any inherent
issues disclosed in it and have the terms of the contract
negotiated where possible to give you the best outcome;
Ensure you have carried out the necessary due diligence so you
are comfortable that you are aware of the state of the property.
That is generally done by way of building and pest inspections and
strata inspections, although other inspections such as plumbing or
electrical inspections can also be carried out;
Ensure that if you need to obtain a loan to purchase the
property that you have pre-approval by the auction date; and
If you have any specific plans about what you wish to do with
the property that you have discussed those with your lawyer and
also the Council (depending on the nature of your plans) to ensure
that you can do what you are intending to do with the
Focus Legal can review the contract and negotiate amendments on
your behalf, organise a building and pest inspection or strata
inspection (as applicable), liaise with your lender to expedite an
approval and advise you on anything in the contract that may affect
your specific plans.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Warranties can be risk-shifting mechanisms when the party giving the warranty is not the party at fault for the defect.
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