Winning bidder at Boardroom Auction fails to get finance

I went to a hastily called Boardroom Auction last week for a property. The winning bidder at the auction has failed to get finance, so it seems the property will now be up for sale again.

How often does this happen?

What is the point of going to an auction and bidding if you are not 100% sure you have the finance to back up your bid?

 

The purchaser cannot back out of a new unconditional sales contract which is the type of contract under auction conditions.

If the buyer can't settle, the vendor must sue for specific performance.

 

It was a boardroom auction with a 3 day cooling off period. The buyer will have paid a 10% deposit, if he fails to get finance in that 3 day period then he loses his deposit?

 

burgess rawson auction ?

 

Why does a boardroom auction have different rules? Sounds weird to me.

 

It was not a public auction, the property was off-market, thus under the rules of the state that it took place the buyers have a 3 day cooling off period.

 

Many auctions fail when a buyer can't settle. Auctions aren't iron clad.

 

Boardroom auctions (not public auctions) are used regularly to resolve multiple interest in a private sale or a pre auction offer.

They are not under auction rules unless 3 days before or after an auction.

Up to the owner if they want to allow buyers to bid conditionally.

 

I know someone who had this happen to them.
The buyer didn't even pay a deposit and just said he couldn't complete.

The seller didn't sue even though they resold at auction for a lower amount. The ******* even turned up at the second auction too

 

seems a bit suss as they usually only do a boardroom when an acceptable offer has been tabled and want to give all interested parties a chance to fight it out with very short notice . The starting prices is the offer price and is "on market" straight away. Have only seen it in 1.5M plus market

 

burgess rawson auction now require a deposit of minimum 10k before you can bid on auction.

 

Yes, this house was on the market at the auction as an acceptable offer had been made by one party and two other parties (I was one of these two) had also expressed interest.

 

So I assume neither of you two bid, it seems a bit weird to me, it seems like it was mishandled by agent rather than an attempted con job. Now the agent has lost credibility with you and the other interested party

I have seen bidders run away, go inside and demand 6 month settlement when it had never been discussed o but not this

 

Kaibo how is this weird at all? It seems like a fault legitimate scenario in the sale of a property.

 

I agree, nothing that weird here, it was just a situation where someone turned up and bid at an auction who did not have approval for the finance. It was a private auction called at short notice so I guess the guy took a chance that the bank would approve his loan application.

When you get the phone call from the agent a couple of days after the auction you feel somewhat short changed being the losing bidder in the knowledge that the winning bidder really should not have been bidding.

I am just taking it as a lesson, its a fault in our sale process, one that the agents I believe tolerate because if they had stricter rules for attending an auction (ie finance approval in writing from a bank) then this would deter a lot of bidders.

 

I think it's weird that the agent (probably incompetent) didn't delay the auction for 3 days instead of offering a 3 day cooling off period.

All boardroom auctions (some of them were actually on site on a weeknight) I have attended have been held under auction conditions (unconditional) and before attending I have been told to not bother showing up if I can't sign an unconditional contract.

If I am the vendor I would not be happy with the way it was handled but I would have objected to a cooling off period in any form of auction (As a vendor you got one chance to do it well)

 

Lol if you made an offer would you wait days with it sitting on the table for a boardroom auction to take place? I wouldn’t and most buyers wouldnt.

I’m an agent and we use boardroom auctions all the time, in probably less than 5% of occasions does a sale not proceed.