Forums / Property Investing / Help Needed! / Having no cheque at an auction, can I still buy?

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  • Profile photo of cadancadan
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    @cadan
    Join Date: 2006
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    What are my options for the above scenario. If I turn up at an auction and I am the successful bidder and I don't have a cheque book what can I do? can I still purchase.The reason I ask is even though someone can give the cheque after the auction, and say it falls on a saturday, the agent can't deposit the funds until Monday (can't I just go to the bank on Monday and get a bank cheque done?). Adive would be appreciated.

    Profile photo of Dave HooperDave Hooper
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    @dave-hooper
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    Not an expert in this area, but my feeling is that they'll want a cheque, so they may suggest that they follow you back home after the auction so they can collect it on the spot.

    Profile photo of cadancadan
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    @cadan
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    Dave H wrote:
    Not an expert in this area, but my feeling is that they'll want a cheque, so they may suggest that they follow you back home after the auction so they can collect it on the spot.

    Thanks, but what happends if you don't have a cheque book but have the funds sitting in your account in the bank? (ie. I can make a cheque on the monday but don't have any cheque or cheque book on me)?

    Profile photo of tenorBbtenorBb
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    @tenorbb
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    A work colleague of mine bought a property in an auction format a few weeks ago. I remember him telling me the day before the auction, "I've got my cheque book in my back pocket….just in case"
    Seems like if you're serious about purchasing at an auction, you'd have the purchase details already sorted…………………….

    Profile photo of Dave HooperDave Hooper
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    @dave-hooper
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    cadan wrote:
    I can make a cheque on the monday but don't have any cheque or cheque book on me)?

    I think it would depend on the laws relating to auctions in your state.

    Here is a handy summary of the laws relating to auctions held in Victoria.

    Hope this helps.

    tenorBb wrote:
    …if you're serious about purchasing at an auction, you'd have the purchase details already sorted.

    You would hope so, but I've often heard of people making spur of the moment auction purchases. I guess this is part of the reasoning behind an auction, to build the excitement and spontaneity of the event. Not something I'd feel comfortable doing, but it does happen.

    Profile photo of LinarLinar
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    @linar
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    Hi Dave

    Call the RE Institute in the state where you want to buy.  I know that sometimes the agents want a bank cheque for a deposit.  If the auction is on a Saturday afternoon, obviously it is impossible to know how much the property is going to sell for and therefore impossible to have a bank cheque for a 10% deposit.

    Depending on where you are and therefore how hot the market is, you may be able to  negotiate terms before the auctioneer.  For example you may be able to show the agent a bank account statement showing that you have sufficient money.  if doing this don't show the agent until after the auction.  Tell the agent prior to the auction that you don't have a cheque but if you are the winning bidder you will show him that you have sufficient funds to cover the deposit.

    I know in some circumstances you can approach the agent beforehand and ask if you can buy but not on auction terms.  I have done this before.  I didn't end up buying the property but had I bought it I would have only paid a minimal deposit and had the purchase subject to various inspections.  Don't expect this request to be met favourably in a hot market though.

    Cheers

    K

    Profile photo of blogsblogs
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    @blogs
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    I cant see it being a problem at all-what are they gunna do? try to let you get away and try to sell it to someone else? They will do everythying they can to hold you to the sale so dont stress!!!!

    Profile photo of cadancadan
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    @cadan
    Join Date: 2006
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    Thanks everyone. Even though I have a cheque book and have bought at auction before, when I bought at auction and gave the cheque to the agent, the agent could not transfer any funds until I could transfer the 10% of the purchase price into that account on the Monday, so technically, what he held in his hand til late Monday had a face value of zero dollars. But my point relates to buying at an auction with no cheque book, its all good and well saying that if your interested or serious you would have the cheque book or finance sorted, but I was thinking like last week, I drove past a property and it was at auction, now had I purchased, my cheque book was sitting in my office at work, and I couldn't get to it before Monday, now had I purchased, what do I tell the agent, my cheque book is at work and can't get to it before Monday, or an even quicker solution is follow me to the bank on Monday morning, and you will have a bank cheque in your hand or a direct transfer into the trust account.

    Profile photo of eKwateeeKwatee
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    @ekwatee
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    cadan,

    You can ask prior to the auction for a variation to the auction terms allowing you to make the deposit payable on the Monday and if the vendor's accepts your variations you'll be ok.

    Profile photo of ducksterduckster
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    @duckster
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    Have you thought of using a deposit bond just a financial instrument you might want to consider or know about.
    Sometimes you have the equity in another property but no cash

    You could see if the real estate agent will accept a deposit bond
    ask banks if they issue them
    see
    http://www.smartline.com.au/DepositBonds.html
    http://www.findlaw.com.au/article/10086.htm
    http://www.asic.gov.au/fido/fido.nsf/byheadline/Home+loans?openDocument#deposit
    https://www.propertyinvesting.com/forums/getting-technical/finance/22804
    Some organisations that do issue deposit bonds – not a recommendation !

    see
    http://www.anz.com/aus/ind/insurance/deposit/faqs.asp
    http://www.depositpower.com.au/
    http://www.depositbondaustralia.com.au/web/?gclid=CN6Bh_zm3pECFRVaiAodR1sSXw
    http://www.stgeorge.com.au/insurance/deposit_power_bonds/default.asp?orc=personal

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