How Does An Auction Purchase Work?
Before
the Auction
01
1.Check Property
2. Check Financing
3. Read POS & COS
4. Prepare Deposit
5. Set Your Maximum Bid
6. Register as Bidder
During
The Auction
02
1. Join The Auction
(Online / Physical)
2. Place Your Bid
3. Stay Within Your Limit
4. Auction Results
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After
the Auction
03
If Unsuccessful
1. Await Deposit Refund
If Successful
1. Sign Contract of Sale
2. Pay Differential Sum (if any)
3. Pay Processing Fee (if any)
4. Proceed with Legal Process
5. Pay Balance Purchase Price
6. Settle Applicable Outgoings
7. Arrange Possession
01 — Before the Auction
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1. Check the Property
Before bidding, identify exactly what you are buying.
Check:
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Property address and unit/lot number
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Property type and approximate size
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Title information, where available
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Location and surrounding environment
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Occupancy status, where ascertainable
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Physical condition that can be observed
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Estimated market value
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Current reserve price
Important: Auction properties are generally sold on an “as is where is” basis. Internal inspection may not always be possible, so conduct as much due diligence as reasonably possible before bidding.
2. Check Your Financing
If you intend to use a housing loan, assess your financing ability before the auction.
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You should consider:
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Your loan eligibility
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Estimated financing margin
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Difference between your loan amount and purchase price
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Cash required for the auction deposit
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Legal fees, stamp duty and other purchase costs
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Funds required if the valuation is lower than your winning bid
Winning the auction does not guarantee loan approval.
If you are unable to complete the purchase within the stipulated period, consequences may apply under the relevant Conditions of Sale.​
3. Read the POS & COS
ALWAYS READ THE POS & COS
The Proclamation of Sale (POS) and Conditions of Sale (COS) contain important information and terms governing the auction.
Check particularly:
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Reserve price
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Auction date and method
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Deposit requirement
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Registration requirements
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Completion period
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Eligibility or purchase restrictions
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Treatment of outstanding charges
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Conditions relating to possession
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Other special conditions
Do not assume that the terms are the same for every auction.
4. Prepare the Deposit
Check the required deposit amount and payment method stated in the auction documents.
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In Sabah, three common type of deposits are: -
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5% Deposit under CIMB auction
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10% Deposit for LACA / Master Title case
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25% Deposit for Non-LACA / Title case
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Depending on the auction, the method may include bank draft, banker’s cheque, online transfer or another prescribed payment method.
If the successful bid exceeds the amount used to calculate your initial deposit, you may also be required to pay a differential sum after the auction according to the applicable auction conditions.
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5. Set Your Maximum Bid
Before the auction, decide the highest price you are prepared to pay for the property.
Consider:
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Estimated market value
-
Property condition and potential repair costs
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Your financing capacity
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Possible difference between valuation and purchase price
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Additional cash and purchase costs required
6. Register as a Bidder
Complete the bidder registration before the stipulated deadline and prepare the documents required by the auctioneer or auction platform.
If you intend to appoint a representative to bid on your behalf, prepare the required authorisation letter and supporting documents in advance. Ensure that the authorisation also covers the execution of the relevant auction documents on your behalf if the bid is successful, where permitted.
Requirements may differ depending on whether you are bidding:
Online · Physical Auction · Personally · Through an Authorised Representative
BEFORE YOU BID
Know the property. Know your financing. Read the POS & COS. Prepare the required funds. Most importantly, decide your maximum bid price before the auction starts.
02 — During the Auction
1. Join the Auction
Join the online auction or attend the physical auction according to the stipulated time and procedure.
2. Place Your Bid
For a single bidder, bidding generally starts from the reserve price. Where there are multiple bidders, the opening bid price may be adjusted according to the applicable auction procedure before competitive bidding begins.
3. Stay Within Your Limit
Follow the maximum bid you decided before the auction. Avoid making an emotional decision simply to outbid another bidder.
4. Auction Result
If unsuccessful → await deposit refund according to the applicable procedure.
If successful → proceed to the post-auction requirements under the POS & COS.
03 — AFTER THE AUCTION
If Unsuccessful
Follow the applicable auction procedure for the return or refund of your auction deposit.
The refund method and processing time may vary depending on the auctioneer, bank or auction platform.
If Successful
Once declared the successful bidder, you must proceed with the purchase according to the requirements and deadlines stated in the POS & COS.
1. Sign the Contract of Sale
You or your authorised representative, where permitted, will need to complete and sign the required Contract of Sale and/or other auction documents following a successful bid. Ensure that the authorised representative has the necessary authorisation documents to sign on your behalf.
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2. Pay the Differential Sum (if any)
If an additional amount is required to make up the stipulated deposit based on your successful bid price, the differential sum must be paid within the required timeframe.
3. Pay Processing Fee (if any)
Some auctions may require a processing or administrative fee. Refer to the applicable auction terms for the amount and payment requirements.
4. Proceed with the Legal & Financing Process
Contact or appoint your lawyer promptly.
If financing is required, proceed with the loan application, valuation and loan documentation as soon as possible to meet the auction completion deadline.
5. Pay the Balance Purchase Price
The remaining purchase price must be paid within the completion period stated in the POS & COS.
IMPORTANT — WATCH THE COMPLETION DEADLINE
A successful bid commits the purchaser to the transaction subject to the applicable auction conditions. Do not assume that a delay in loan approval will automatically extend the completion period.
6. Settle Applicable Outgoings
Check the POS & COS carefully to determine the treatment of applicable outgoings such as maintenance charges, sinking fund, assessment rates, quit rent and other outstanding charges. The responsibility for these amounts may differ from one auction to another.
Where certain outgoings are claimable from or borne by the bank under the POS & COS, the purchaser may consider settling the amount first and submitting a claim thereafter, where permitted. This may help avoid delays while waiting for the bank to arrange direct payment. Keep all original receipts and supporting documents for claim purpose thereafter.
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7. Arrange Possession
Once the purchase has been completed, proceed with taking possession of the property according to its actual occupancy status.
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If the property is vacant:
The purchaser may need to arrange access to the property, including engaging a locksmith where necessary, after confirming that the purchase has been completed and the purchaser is entitled to take possession.
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If the property is occupied:
The purchaser may need to communicate with the occupier to arrange for vacant possession. If the occupier does not agree to vacate, seek legal advice on the appropriate steps to recover possession.
Do not assume that an auction property will be handed over with vacant possession or that keys will be provided. Check the POS & COS and confirm with your lawyer before taking any action to enter or recover possession.
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Important Things to Know
As Is Where Is
Auction properties are generally sold in their existing condition and circumstances. Internal inspection may not always be available, so buyers should conduct their own due diligence before bidding.
Vacant Possession
Do not assume that an auction property will be delivered vacant. Check the occupancy status where possible and refer to the POS & COS for the applicable conditions.
Every POS & COS Is Different
Deposit requirements, completion periods, outstanding charges and other conditions can vary between auctions. Always read the documents for the specific property you intend to bid on.
Auction May Be Withdrawn or Postponed
An auction may be withdrawn, postponed or otherwise changed before the scheduled auction. Check the latest auction status before making final arrangements
Disclaimer
This guide is provided for general information only and does not constitute legal, financial or professional advice. Auction procedures, deposit requirements, completion periods, outstanding charges and other conditions may differ between properties and auctions. Prospective bidders should read the relevant Proclamation of Sale and Conditions of Sale, conduct their own due diligence and obtain independent legal and financial advice where necessary before participating in an auction. In the event of any inconsistency, the relevant auction documents and applicable terms and conditions shall prevail.