The auctioneer tells the assembled crowd that the property is going once, then going twice, and then the hammer falls for the final time, and hey presto—you've bought a home. The immediate results of purchasing a home at auction are in sharp contrast to the more traditional process of making an offer on a listed property, after which the vendors take time to mull over your offer before (ideally) accepting, after which you have time to undertake the necessary steps of finalising your financing. You also have the option of withdrawing from the sale during the cooling off period after contracts have been exchanged, such as if conveyancing uncovers any information that might cause you to reconsider the purchase. Conveyancing still plays a vital role in purchasing a property at auction, and it can be arguably more important since a successful bid at auction obligates you to immediately proceed with the purchase.
Given the financial significance of purchasing a home, it's highly unlikely that you would place a bid on a property at auction without financing in place, and nor should you. With the rapid completion of a post-auction property purchase, your financing needs to be arranged and ready to execute, although naturally there is a chance that you will be outbid or that your maximum allowable bid will be below the property's reserve price. Your financing will, of course, correspond to your maximum allowable bid for the property, and ideally, your successful bid will be beneath this amount. If your bid is successful, your conveyancing will need to have already occurred prior to the auction.
A detailed property report can be prepared by a conveyancer before an auction, since much of the relevant information is a matter of public record and can be found by those who know how and where to look. The report will include the title details of the house (with the vendor usually being the current residents, but it can also be a creditor if the property has been repossessed), along with the usual proximity information, such as if any residential or civic works have been planned for the area.
Some conveyancing services might also offer a pre-auction report, which is comprised of all the pertinent information that can be located on a property to be auctioned, with additional services (such as overseeing the transfer of the deposit) being activated in the event of a successful bid. The conveyancer's indemnity insurance can also protect you in the event of unforeseen circumstances so that you can get your deposit back should the sale not be completed for whatever reason.
Purchasing a home at auction still requires property conveyancing, and it's important to remember that as much of this as is possible needs to have been completed before you raise your hand to bid at the auction.Share