There are two ways for a property to be sold; either by private treaty or by public auction. In the case of private treaty, a property is advertised by an agent with a set price or price range. Buyers can negotiate the price and, once an offer is accepted by the vendor, the purchaser can also negotiate the other terms of the contract. But what is the situation when the property is to be sold at an auction where it is to go to the highest bidder?
Normally, if a party is interested in buying a property at an auction, that party will ask their solicitor to review the contract in advance. After receiving the solicitor’s advice, the party will instruct their solicitor to send an e-mail to the vendor’s solicitor requesting certain amendments to the contract if the party is the successful bidder.
Common amendments may include:
(a) changing the date of settlement;
(b) reducing the deposit from 10% to 5%;
(c) adding certain items as inclusions;
(d) allowing the use of a deposit bond instead of payment of a deposit; and
(e) deleting a release of deposit clause.
If a party turns out to be the successful bidder at the auction, before the contract is signed, they will give the agent a copy of any correspondence between the solicitors for the vendor and the purchaser so that the agent can incorporate any agreed changes into the contract. Alternatively, the agent may have been copied in on e-mails and will know what the changes are.
August 2022