Complete Guide to Buying at Auction: Part 3 of 3

*the following information pertains to bidding at property auction in NSW specifically. For auction bidding in other states, please consult local rules and legislation.

In part one and part two of this three part series, we discussed the steps you should take to prepare for auction and the rules and bidding strategies. In this article, we discuss what happens if you're the successful bidder.

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PART 3: A SUCCESSFUL BID

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1. What Happens if You Win?

If you’re the highest bidder when the auctioneer’s hammer falls, congratulations! However, the process doesn’t end there. Here’s what you need to do immediately after winning:

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•Sign the Contract: You’ll need to sign the contract of sale immediately after the auction. In NSW, this contract is legally binding, and there is no cooling-off period. If you are using a buyer's agent or someone to bid on your behalf, make sure they have the appropriate documentation prior to auction providing them authority to bid and sign on your behalf.

•Pay the Deposit: As mentioned, you’ll be required to pay the 10% deposit on the spot (or 5% if previously agreed). Ensure you have this amount readily accessible, either as a bank cheque or cleared funds in your account, or via an alternative approved system. As mentioned in part 1, there is an excellent system called Auction Pay (by Macquarie bank) that is safe and secure and bypasses normal internet banking transfer limits, but check with the agent beforehand as not all agents use this and if you are unable to pay the deposit, technically you will be in breach.

•Finalise Your Home Loan: After the auction, you’ll need to finalise your home loan with the lender, ensuring all documentation and approvals are completed before settlement.

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2. After the Auction: Settlement Period

The typical settlement period in NSW is 6 weeks, although this can vary depending on the terms of the contract. During this time, your solicitor or conveyancer will conduct final checks, and you’ll arrange for the remaining funds to be paid to the seller. Once the settlement is complete, the property is officially yours.

•You will be entitled to a pre-settlement inspection in the 3 days leading up to settlement to ensure the terms of the contract are satisfied. We recommend leaving this as late as possible to ensure the vendor has moved out in full (if vacant possession). A few hours before settlement is enough, however don't leave it too late in case there are issues that need to be rectified before settlement.

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CONCLUSION

Bidding at a property auction requires preparation, discipline, and a clear understanding of the rules and process. By doing thorough research, getting your finances in order, and adopting a strong bidding strategy, you’ll put yourself in the best position to win the auction and secure the property you want. Just remember to stay calm, set your limits, and be ready for both success and the possibility of walking away if the bidding gets too high.

My Property Pro offers auction bidding as a stand alone service so you can (somewhat) sit back on the day and let us use our professional experience and expertise to give you the best chance of winning.

Good luck, and happy bidding!

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