It can be confusing to learn all the real estate jargon when buying or selling a property. Our conveyancers explain some of the commonly used terms in property auctions.
Auctioneer: The person who conducts the auction, accepts bids, and announces the property as sold to the highest bidder.
Reserve price: The minimum price that the seller is willing to accept for the property. The reserve price is set before the auction and is not disclosed to the bidders.
Vendor bids: A bid made by the auctioneer on behalf of the seller to increase the bidding or reach the reserve price.
Property is on the market: This is announced by the auctioneer when the highest bid reaches or exceeds the reserve price. Once the property is on the market, it will be sold to the highest bidder at the fall of the hammer.
Fall of the hammer: The moment when the auctioneer closes the auction by striking the hammer or gavel and announcing the property as sold.
Pass in: This occurs when the highest bid does not reach the reserve price, and the property is not sold at the auction. If the property passes in and there are bidders the highest bidder has the first right to negotiate with the seller after the auction.
Bidder registration: Before bidding at an auction, bidders must register and provide their personal information to the auctioneer. This information is kept confidential.
Deposit: A sum of money paid by the buyer as a show of good faith and commitment to the sale. The deposit is usually a percentage of the sale price and is held in trust until settlement.
Understanding these terms can help buyers and sellers navigate the auction process and ensure that they are fully informed about the sale.
Beware if you buy at an auction you will be buying the property unconditionally. This means there is no cooling-off period or other terms and you are accepting all the terms in the Contract, and Section 32.
So you must ensure that you are satisfied of what is in the contract and Section 32. As most people can’t fully understand contracts or Section 32’s, getting contract advice is essential to avoiding issues. It quite often can save you money as special conditions in the contract can be costly and we can request these be removed or reduced.
Getting legal advice before you sign will ensure that all legal and property issues are fully understood by you before you sign.
Disclaimer: This article has been prepared for general information purposes and may not apply to your situation. This information should not be relied upon for legal, tax or accounting advice. Your individual circumstances will alter any legal advice given. The views expressed may not reflect the opinions, views or values of Conveyancing Depot and belong solely to the author of the content. © Conveyancing Depot Pty Ltd.
If you require legal advice specific to your situation please speak to one of our team members today.
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