BUYING AT AN AUCTION
Buying at auction can be an exciting way to purchase a property, but it comes with unique conditions and risks that all buyers should understand before raising a paddle. Here’s a quick overview to help you prepare.
What do you need to know?
🔨 How Property Auctions Work
➢ Auctions are unconditional—if you’re the winning bidder, the contract is legally binding
➢ There is no cooling-off period
➢ You must pay a deposit (typically 10%) on the day.
➢ Settlement dates and terms are fixed by the seller
⚠️ The Finance Risk
➢ Getting finance approval after purchasing at auction can be risky. Lenders won’t issue full approval until they’ve assessed the property and verified your financials.
➢ If your finance is declined after winning the auction, you may lose your deposit and be liable for damages.
� Preparing for Auction Finance
➢ Get a pre-approval (this is not a guarantee of finance).
➢Share the specific property details with your broker before auction to request upfront lender assessment.
➢Have your deposit funds accessible and ready.
➢Understand your borrowing capacity and repayments clearly.
➢If relying on LMI or a guarantor, confirm lender acceptance in advance.
📋 Legal and Property Checks
➢ Review the contract of sale with your solicitor or conveyancer before auction day.
➢Arrange a building and pest inspection.
➢Have your solicitor check for any title issues or easements.
✅ Final Tips
➢ Set a firm budget and stick to it
➢Don’t bid unless you’re fully prepared to complete the purchase.
➢Keep your broker in the loop at every stage – we’re here to help!
If you are thinking of buying at an auction, contact us for a personalized finance check and guidance through the process.
Smooth Sailing Finance Consulting
0418 980 876
office@smoothsailingfinance.com.au