Pre-purchase Inspection and the Auction
In an auction sale, the property is sold to the highest bidder, and the sale is final and unconditional. This means the buyer cannot conduct a pre-purchase inspection before the sale. However, it is still important for buyers to have a building inspection before the auction to ensure they are aware of any potential issues with the property. A cooling-off period does not apply if you buy a property at an Auction or exchange contracts the same day as the auction after it passed in. You need to arrange your pre-purchase building inspections before the Auction!
Buying a property at auction in NSW can be a fast-paced and exciting process, but there are also potential pitfalls to watch out for. Here are some common pitfalls to be aware of during a residential auction in NSW:
It is important to set a clear budget and stick to it during the auction. The pressure and excitement of the auction can lead to overbidding, which can result in paying more than the property is worth or more than the buyer can afford.
Lack of preparation
Buyers should conduct thorough research on the property and the local market to ensure they clearly understand the property’s value and potential issues. Failure to prepare adequately can lead to missed opportunities or unexpected issues with the property.
Buyers should have pre-approval for finance before the auction, as the sale is final and unconditional. Failure to secure adequate finance can result in the buyer being unable to complete the purchase.
Buyers should be aware of additional costs associated with the purchase, such as stamp duty, legal fees, and building inspections. Failure to factor in these costs can result in unexpected financial burdens.
Remember that in some cases, sellers often complete their pre-purchase building inspections for potential buyers. We strongly recommend not using these reports as a substitute for your arranged building inspection.
What to do Before Auction
Inspection before the auction
While there is no opportunity for a pre-purchase inspection after the auction, buyers can still have a building inspection conducted before the auction. This can help them identify any potential issues with the property before making a bid.
The inspection report can provide valuable information to the buyer regarding the property’s condition, which can be used to make an informed decision about whether to bid on the property.
In an auction sale, the principle of “buyer beware” applies. This means that the buyer is responsible for conducting their own due diligence and is expected to have a reasonable understanding of the property’s condition before making a bid.
It’s also important to note that, as a buyer, you won’t always want to rely on the vendor’s or the seller’s pre-purchase inspection. It’s not always in their best interest to perform a top-to-bottom building inspection, so to protect yourself, getting your pre-purchase building inspection is ideal.
As we often hear, you get what you pay for, and the cheapest pre-purchase building inspection won’t always be your best bet. After all, when you’re buying a home, something as important as a pre-purchase building inspection, you want to make sure you’re working with a trustworthy building inspector!