Buying residential property at an auction

Property Law: 14 February 2024

Author: Lauren Woolley & Ralph Davies - Our People

We all like watching a live auction (particularly on The Block), but whilst it might appear quite glamours, there are certain things you should be mindful of when purchasing a residential property at auction in Victoria.

For example:

• You will not be entitled to a cooling-off period. For a private sale, a cooling-off period entitles you to terminate a signed contract within three days from its execution by providing written notice to the vendor. If you end the contract in this way, you are entitled to a refund of all the money you paid except for $100 or 0.2% of the purchase price (whichever is more). Unfortunately, ordinarily, there is no room for buyer’s remorse when purchasing a residential property at an auction.
• When purchasing a residential property at an auction, the contract will be unconditional. This means the contract cannot be subject to you receiving formal loan approval or obtaining building and/or pest inspections, you will buy the property as is. This also means you may be limited in what terms of the contract you can negotiate on.
• Following the auction, it may not be possible to end it without defaulting and losing your deposit.

The above list is not exhaustive, and we strongly recommend that you seek our advice and assistance before purchasing any property at auction.