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Buying at auction with a side agreement

Discussion in 'The Buying & Selling Process' started by Bran, 17th Dec, 2015.

  1. Bran

    Bran Well-Known Member

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    I've been told that one can buy at auction, with a pre-arranged agreement along the lines of

    'If I'm the winning bidder, my purchases comes with the condition of X days finance, and x days building and pest'.

    Obviously there is a downside and risk for the vendor, but nevertheless might be agreeable - especially if its all about price.

    Can anyone confirm or advise? (The question is specific to QLD). How is this formalised?
     
  2. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    You can arrange anything, by putting it in writing and getting the other side to agree. But for an auction it would be most unusual (but not impossible). I once purchased at auction with a "subject to finance" clause, which is almost unheard of. Most vendors would not go for such a thing and their selling agent would advise against it.
     
  3. Marg4000

    Marg4000 Well-Known Member

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    As said, you can pre-arrange anything if agreed.

    But you may find that the initial auction will be for a clean contract.

    A few years ago I attended an auction, the budding was sparse and the property was passed in. The auctioneer commented that there were several contracts submitted with conditions attached that the vendor would now consider.
    Marg
     
  4. Wall Street

    Wall Street Well-Known Member

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    Subject to finance (or other conditions that allow an easy escape from contract completion) is unlikely - it works against the vendor whose intention is to offload the property on the day. That said - it's not impossible.

    There are other conditions that are more common - I normally agree with the agent beforehand to 5% (instead of 10%) deposit, which is normally accepted.
     
  5. willair

    willair Well-Known Member Premium Member

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    Just put yourself in the vendors shoes,and also have a copy of the contract that they will use on the day,finance and pest and build would not be on the contract they will use,you could pass one onto the agents selling the property prior with any clause you want,if the auction does not work as it's around 50/50 end up selling on the day,the they may sign a new contract with your clauses,or throw it in the bin..imho..
     
  6. Kinnon Bell

    Kinnon Bell Finance Broker

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    I managed to negotiate a finance clause with a vendor a few year ago with a house that was going to auction. The agreement was if I was the winner bidder then a 14 day finance clause would apply.

    Never got to test it out though as the vendor pulled the pin on the auction the day before it was due to happen.

    Worth mentioning this was in Cairns when the market was still reasonably flat.