Rules for offers, auctions and buying off the plan

Each offer must be in writing and signed by the potential buyer. The agent must tell the seller about an offer within 48 hours.

Potential buyers aren’t told about other offers. The seller can accept a higher offer without giving you the opportunity to negotiate.

A holding deposit of up to $100 can be requested. This is kept in trust and will be returned if the offer isn’t accepted.

Withdrawing an offer

The buyer will need to complete a cooling-off notice to withdraw. This must be delivered to the seller or their agent by:

• registered post
• fax
• in person.

You should get legal advice before withdrawing from the sale after the cooling off period expires.

Make sure any conditions are included in the contract before you sign it. Once a contract is signed by the buyer and the seller it is legally binding.

Examples of conditions can include:

• The offer will be withdrawn if the seller doesn't sign the contract by a certain date.
• A satisfactory building inspection report must be received.
• The buyer is able to obtain satisfactory finance.

Make sure the condition is clear. A solicitor or conveyancer will be able to advise about the wording.

In many cases, the buyer is entitled to a cooling off period of two business days. This starts when you receive the vendor's statement - What is included on a vendor's statement - or from the date the contract of sale was signed, whichever happens last. This gives you the chance to withdraw from the sale without being held legally responsible.

The buyer will need to complete a cooling-off notice to withdraw. The vendor’s statement (form 1) outlines:

• the buyer’s cooling off rights
• the exceptions that apply
• how to deliver the cooling off notice to the vendor or their agent.

You should get legal advice if you want to withdraw from the sale after the cooling off period expires.

The deposit must be paid once the cooling off period has expired. This money is held in trust until settlement.

Make sure you prepare by:

• reading the vendor's statement (form 1). The statement is available:
  • from the auctioneer or the seller’s agent at least 3 working days before the auction
  • at the auction site as least 30 minutes before it is due to begin
    What is included on a vendor's statement
• checking that any building inspections you have arranged are complete and you are aware of any issues
• checking that property valuations required by your bank are complete
• arranging building insurance for the property - cover note
• registering to bid.

Registering to bid

All potential bidders must register before the auction. However, the auctioneer could choose to pause the auction so someone who arrives late can register.

Bidders and anyone bidding on their behalf must show ID. The agent can’t keep or make a copy of ID without consent.

If someone will bid on your behalf, they must show a document - signed by you - to prove they can bid for you. An incorporation certificate is needed if someone is bidding on behalf of a company.

A person intending to place a bid must not hinder, harass or prevent another bidder from placing their bid. This carries a fine of up to $20,000.

We recommend you read this information:

• bidder's guide (formR4) (43.2 KB PDF)
• collusive practices statement (form R5) (28.1 KB PDF)
• buyer's information notice (form R3) (39.7 KB PDF).

The agent must record each bid as it is made and who placed it. This written record must also include the outcome of the auction.

Vendor bids

The seller can make up to three vendor bids. These must be lower than the reserve price. The auctioneer must announce vendor bids as they are made.

Dummy bids

Dummy bidding is when someone poses as a genuine bidder to increase the price. This carries a fine of up to $20,000.

Paying the deposit

The deposit amount is negotiable and can be as much as 10% of the sale price.

A lower amount can be negotiated before either:

• the auction
• a bank guarantee is arranged.

The seller’s agent must place the deposit into a trust account until the settlement date.

Your contract is legally binding once you and the developer sign it. Read it carefully as there could be conditions in the contract that will affect your rights.

Before you sign

You should ask about:

• making changes to finishes such as paint colours, appliances or flooring
• your rights if:
  • development approval isn’t given
  • the house isn't completed on time
• what changes can be made to the design after the contract is signed
• who is responsible for repairing defects after the home is finished
• visits to the construction site while your house is being built
• how you or the developer can cancel the contract
• any additional costs.

Things to consider

Visit the land your house will be built on and check the size, location and aspect as designs could change after the contract is signed.

If the property will be part of a group, ask if it will be strata, community or Torrens title and check how this will affect you. For example, are pets allowed?

Always keep a copy of:

• documents you sign
• promotional material used by the developer
• the house designs and plans
• letters sent to you by the developer or related to the construction.