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Don't get burnt at auction

By Kay Keam - 3 May 2013

In the red hot Auckland property market, many aspiring buyers have found themselves caught in an increasingly complex auction process. Auctions are currently the most common method of sale with two out of five properties being sold this way. Auctions are consistently brought forward from the advertised date and this can lead to confusion and tight timeframes.

Most vendors and real estate agencies retain the right to bring an auction forward from the date originally advertised. This normally occurs when a pre-auction offer has been made to the vendor which is above the reserve price. The agent then sends out notification of the new auction date to everyone who has previously expressed interest in the property. On the auction date the reserve price will be the figure contained in the pre-auction offer. If no higher bids are received on the day, then the vendor will be able to "fall back" on the pre-auction offer.

But what if the party who advanced the pre-auction offer decides to withdraw between making the offer and the auction date you ask? Well, in the usual course of business, the agent will have the purchaser sign an acknowledgement that they will not do this.

The whole process is of course favourable to a vendor and can leave very little time for an interested purchaser to investigate a property, particularly if they only have one or two days to do this before a revised auction date. Martelli McKegg can of course help you with this by providing prompt legal advice throughout this process.

Contacts

Kay Keam

 

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