Sale and purchase process, auctions, tenders and multi-offers
This domain tests the sale and purchase process and the different rules for auctions, tenders, and multi-offer situations. Expect questions on conditions, unconditional contracts, bidder conduct, and fair process.
Core rules
- A standard sale and purchase agreement records the parties, price, deposit, conditions, settlement date, and inclusions. Common conditions include finance, LIM, title, builder's report, and due diligence. Conditions must be satisfied or waived by the stated date.
- At auction, the contract is unconditional when the hammer falls. There is no cooling-off period. Bidders should complete finance, LIM, and inspection work before bidding. Vendor bids and auctioneer conduct must follow the auction rules.
- A tender is a written offer by the deadline. The vendor is not obliged to accept the highest or any tender and may negotiate. A tender can be conditional.
- In a multi-offer process, tell all interested parties that it is multi-offer, set a fair deadline, present all offers, and do not disclose one buyer's price or terms to another.
Worked example
A bidder at auction asks to add a finance condition after the hammer falls. The auctioneer cannot add it; the contract is already unconditional. The bidder's remedy was to arrange finance before bidding. The agent should explain this before auction day, not after.
Traps
- Treating the highest tender as automatically successful.
- Revealing a competing multi-offer to a buyer.
- Assuming an auction has a cooling-off period.
- Letting a buyer add conditions after the fall of the hammer.