Auctions have boomed in popularity in recent times – and it seems that Australians love them.
But do most auction-goers really understand the ins-and-outs of buying property at an auction?
According to a new survey, nearly half of Australians have attended an auction, but many don’t understand concepts like “cooling off” periods.
The survey, which was conducted by law firm Slater and Gordon, found that 48% of respondents had attended an auction in the past.
However, it also found that:
- 42% of respondents didn’t know that there would have been no “cooling off” period if they successfully bid at auction.
- 13% of respondents didn’t understand what the term “cooling off” period meant.
- 15% of respondents who had planned to bid when attending an auction hadn’t sought any legal advice.
Slater and Gordon’s Robert Kern said the results were concerning – particularly in the current market.
If there is no “cooling off” period” it means a buyer can’t change their mind after a successful auction bid.
Kern said that, for this reason, buyers needed to beware.
“If you’re intending to buy at auction, or even think you might, do your research properly because, once you sign on the dotted line, you’re obliged to buy that property.
He said that, if interested in a property, before the auction potential buyers should make sure they:
- Conduct the full gamut of searches and inspections: valuation, building and pest inspections, title searches, easements, building approvals, etc.
- Get council approval for any planned extending or rebuilding work.
- Request any desired changes to the contracts.
- Kern also said it was important to have solid finance in place before bidding at auction.
This is because if, after an auction, a property turns out to be worth more, or less, than indicated financial institutions might not be willing to provide finance.
“Ultimately, the onus is on the buyer to ensure that they are getting what they paid for,” he said.
“Taking the time to get advice before an auction is a much wiser strategy than getting lumped with a white elephant after the hammer falls.”