Buying your home at an auction can be both exciting and stressful. Aside from knowing your budget (and not bidding over it), you should also be aware that one of the most important differences between buying your home by private treaty and buying it at an auction is the 'cooling off' period.
By law, buying your home by private treaty normally entitles you to a 'cooling off' period of 5 business days after the date of the contract. During the cooling off period, you can change your mind about going ahead with the contract and cancel it even though you have already signed it and paid a deposit. If you cancel the contract during the 'cooling off' period, you will forfeit 0.25% of the purchase price. There is no cooling off period if you buy your home at an auction. This means that you cannot cancel the contract if you change your mind without being in breach of the contract. The likely consequences of breaching the contract are losing all of your deposit and having to compensate the seller for other costs or financial losses.
If you are intending to buy your home at an auction, you should do your research before you start bidding. Some basic points to consider are:
If you are the successful bidder at the auction, you must the sign the contract and pay the deposit immediately. It also means that you accept the contract and all of its terms and conditions, regardless of whether you are aware or understand those terms and conditions. We strongly advise that you do the following BEFORE you attend an auction: