Interesting Myths Busted by Emily Power of Domain

If you are the successful bidder you legally have to sign the contract. FALSE
If you scratch your nose and accidently buy a house, you can do a runner. The auction system relies on trust and goodwill. The sale is only binding once the contracts are signed. But if a buyer signs the contract and changes their mind before handing over the deposit, they can be sued. It is unusual, says the Real Estate Institute of Victoria, for a successful bidder not to sign the contract.

You need to have a deposit cheque filled out and in your pocket at the auction. FALSE
A buyer can bid and sign the contracts without a cheque, but agents often try to execute the contract within 15 minutes of the hammer falling. Some are content to accompany a buyer home to collect the deposit, others will ask them to sign a promissory contract, and some will be willing to wait until the Monday after a weekend auction.

Add zeros to the weekly rent amount and that is the value of the property. TRUE, kind of. This crude formula seems to work for some newer apartments, especially around the inner-city suburbs, in which a modern $400,000, one bedroom pad is able be leased out at roughly $400 per week. However, at the higher end of the market, the maths definitely doesn't add up. Properties leased out at around $2000 a week - considered a luxury rental in Melbourne - would set a buyer back much more than $2 million. Leave this strategy for a pub game - where we've heard this thrown around - not the bargaining table.

If any agent says your offer - prior to auction or by private sale - has been verbally accepted by their vendor, the deal is as good as done. FALSE Until buyer and seller have signed the contracts, the sale is not legally binding. If a more appealing offer is put forward before contracts are inked, it's no more than bad luck that a buyer that thought they had the keys to their dream home in the bag can be gazumped

 

Uh I think she might be wrong about this one. I think a successful bidder can be compelled to sign in the normal circumstances.

 

Could this differ from state to state?

 

There's a good reason why I wear trackies and runners to auctions!

 

Not in Victoria.

 

Yes, in Qld at least if you don't sign after being the successful bidder the Auctioneer can sign on your behalf. You agree to this when you sign up as a bidder.

pinkboy

 

We attended an auction once and the successful bidder just walked to their car and left. What the?

 

Maybe they didnt know they won? Lol. In NSW the auctioneer can sign on behalf of the successful bidder