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Auction Contracts

Auction ContractsWhen a property is purchased at Auction there is no cooling off period and both parties to the contract are required to sign a binding contract. Copies of the contract will be available at and before the auction for buyers to inspect and get legal advice if they require. All inspections and checks need to be done before the auction date. Finance should be approved or at least approved in principal subject only to valuation of the property.

When a person has successfully made the highest bid and the property is sold “under hammer” they are required to pay the deposit and sign the contract. Both parties are immediately bound to the contract when the auctioneer declares the property sold. The Auctioneer has the right to sign the contract on behalf of both vendor and purchaser should either party not be willing or for some reason not able to sign the contract. He is able to sign for the vendor by reason of the auction agreement and at general law.

He is able to sign for the purchaser by reason of general law. His authority arises as soon as the contract is concluded and is an irrevocable authority. You should note that the auctioneer’s authority is to sell by auction and that authority ceases at the conclusion of an unsuccessful auction.

If a property is sold on the same day as the auction and contracts signed and exchanged the buyer still does not have the benefit of a cooling off period. However, if the contracts are not exchanged until some day after the auction then the cooling off rights apply.