New laws introduced on 30 November 2016 allow for the forced sale of units in an apartment
The strata management industry is in for a significant shake up with the “once-in-a-generation” changes to strata laws being introduced on November 30, 2016. The NSW Government has amended the laws regarding the management of apartment buildings allowing 75% of owners in apartment blocks will be able to sell...
ATO targeting property investors
A recent taxpayer alert [Trusts mischaracterising property development receipts as capital gains] concerning property development and the use of trusts is significant for property developers. Taxpayer Alert 2014/1, describes an arrangement whereby a trust undertakes property development activities as part of its...
Chinese regulators may turn off the money flow that is funding the Australian real estate bubble
A Chinese Government crackdown on the recently exposed activities of the Bank of China's money laundering efforts in Australia will have repercussions on the sustainability of high property values in Sydney and Melbourne. China’s state broadcaster CCTV has launched an attack on one of the country’s most...
Changing A SMSF Trustee to a Corporate Trustee
Benefits of a Corporate Trustee 1. Changing Members If an SMSF is set up with a corporate trustee structure you can add a member (e.g. a spouse or child) or remove a member (e.g. if a member dies or can no longer act as trustee) with much less hassle than an individual trustee structure. If there is a ch...
Our Legal Fees & Services
At GMH Legal we believe that client relationships matter more than time sheets which is why we offer a range of alternative fee arrangements to best suit your needs. Our focus is on client service and establishing mutually rewarding relationships with our clients. We think that billing by the hour does not ...
Homebuyer’s Guide to Conveyancing
Buying your first home can be a confusing process, particularly when it comes to conveyancing. Taking your first step on to the property ladder can be an exciting time. But for those who have never been involved in a property purchase, the conveyancing process can often seem hard to understand. What i...
During a sale by auction, the amount the seller wants for the property is generally not revealed to potential buyers who are encouraged to attend the auction and to bid for the property against other potential buyers.
Auctions have become increasingly popular way to sell or buy residential property, but before you decide to go down that path, do your homework and familiarise yourself with the process and what it involves.
Property and businesses can only be auctioned for a fee by:
- An estate agent
- An agent’s representative
- An accredited auctioneer
Please note that an owner or part-owner can also auction their own property
Au auctioneer must:
- Display information and make announcements before an auction starts
- Make announcements and control the bidding during an auction
An auctioneer may:
- Make bids on behalf of a seller to advance the bidding
- Accept bids from co-owners or their representatives who are genuinely bidding.
It is an offence to:
- Knowingly accept a bid by or for a seller, other than a co-owner
- Make or accept fictitious (dummy) bids
- Accept late bids after a property has been knocked down to the successful bidder
Auctioning process – step by step
The reserve price is the lowest amount the seller is willing to accept for his/her property. Before bidding begins, the seller should advise the agent what they nominate as the reserve price. This is usually not told to prospective buyers.
At least 30 minutes before the auction starts, at the auction site the auctioneer must display:
- The rules that apply to the auction
- The prescribed information statement
- Any other conditions, such as those that may be in the Contract of Sale
Before the bidding starts, an auctioneer must make certain announcements. Some are general and apply to all public auctions, others are specific to particular auctions.
General announcements include that:
- The auction will be conducted according to the rules and any additional conditions displayed before the auction starts
- Auction rules prohibit late bids
- Bidders will be identified on request
- Law prohibit and imposes fine for:
- False bids
- Major disruption by bidders
- Bidders attempting to prevent others from bidding
At any time during the auction, an auctioneer can:
- Set the amount for bidding
- Refuse a bid
- Refer a bid to the seller
- Withdraw the property from sale
- Re-submit the property for sale at the last undisputed bid or start the bidding again.
If the highest bid is below the reserve price, the property will be ‘passed in’. The seller will then either try and negotiate a price with interested bidders or put the property back on the market.
If the bidding continues beyond the reserve price, the property is sold at the fall of the auctioneer’s hammer.
Au auctioneer must not accept a late bid, i.e. those made after a property has been knocked down to the successful bidder).
An estate agent or agent’s representative who hears a late bid must not refer the bid to the auctioneer, seller or anyone else.
If a contract is not entered into after an auction and the seller wishes to offer the property for private sale, late bids can be referred to the seller. An agent must pass on all offers, unless instructed not to do so by the seller.
If a property is passed in at auction below the reserve price, the auctioneer can decide whether to accept any late bids, subject to first negotiating with the highest bidder.
The successful bidder must sign the sale contract and pay the seller a deposit on the sport (usually 10%). There is no cooling-off period for anyone who buys a property at auction.
If the property is passed in at auction but contracts are exchanged on that same day, the cooling-off period still does not apply.
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