You’ve secured the property with a winning bid—now what? Understanding what to do after winning a property auction is essential to avoid complications.
Congratulations on Winning the Auction!
In this article, we’ll walk you through the process after the hammer drops, covering everything from contracts and deposits to settlement.
Sale Contract and Deposit
One of the key things to know about property auctions in Australia is that there is no cooling-off period. Once you’ve made the winning bid, you are legally bound to follow through with the purchase. This means signing the sale contract and paying the deposit—typically 10%—right away.
Each state and territory may have specific rules governing this process. For example, in New South Wales, you’re required to sign the contract and pay the deposit immediately. The selling agent will likely accept payment via bank cheque or EFT, and the deposit is then held in trust until settlement.
In Victoria, the process is similar. However, the deposit is generally held in a trust account managed by the seller’s real estate agent, solicitor, or conveyancer. If the vendor is not represented by an agent, the deposit goes into a special-purpose bank account set up by both the buyer and seller.
Legal Checks
The legal process begins with your solicitor or conveyancer, who will conduct legal checks on the property to ensure everything is in order. They’ll confirm the settlement date with the seller’s legal representative and prepare for the next steps.
Finance Approval
Even if you have pre-approval for your mortgage, you’ll need to get formal approval from your lender. This can take 3-5 days, during which the lender will conduct a property valuation. Ensure you haven’t bid above market value, as your loan could be affected.
Mortgage Contract
Once your mortgage is approved, the lender will send a letter of offer and a mortgage contract. According to the National Consumer Credit Protection Act, the lender must provide you with a clear breakdown of all fees, interest rates, and charges in the contract.
Make sure your conveyancer reviews the documents before signing. Each state offers specific guidance, so check the resources available to you. For example, South Australia provides a breakdown of what must be included in your credit contract, such as:
- The total loan amount
- Interest rates and calculation methods
- Fees, charges, and any commissions
- How you’ll be informed of contract changes
Preparing for Settlement
Before settlement, your solicitor or conveyancer will conduct a final inspection to ensure everything is as agreed in the sale contract. They will also prepare the necessary paperwork, including securing the transfer of land document from your state or territory’s titles office.
Settlement Day
On settlement day, your lender, conveyancer, and the seller’s legal team will finalise the transaction. This involves exchanging documents, paying the balance of the purchase price, and transferring ownership of the property. You don’t need to be present for this process, as your legal team will handle it.
Once the settlement is complete, your conveyancer will notify you that the transfer has been registered, and you can pick up the keys to your new property.
Final Tips for New Homeowners
Winning a property at auction is just the beginning. Ensuring that your post-auction steps are seamless is crucial to making your home ownership dream a reality. Always seek legal advice to ensure all steps are followed correctly, and remember, time is of the essence when handling post-auction paperwork.
For more information about buying a property at auction or assistance with your post-auction steps, contact our office at 03 8393 1000.
Hayley Crow is a Credit Representative (CR No: 486223) of Buyers Choice Licencing Pty Ltd ACN 626 172 281 (Australian Credit Licence No: 509484)
