The Block Australia finale aired on New Zealand screens on Sunday, with the winning contestants, Queensland battlers Tam and Jimmy Wilkins, taking home just over A$1 million after their house fetched a whopping A$966,000 above the reserve at auction.
The sale broke records and was a moment of high drama for the show and for the contestants, but the drama didn’t end there.
READ MORE: Find out if your suburb is rising or falling
Shockingly, the renovated Melbourne house is back on the market after the A$4.256 million sale fell through and failed to settle in the weeks after the auction.
Start your property search
It is alleged that the buyer had produced fraudulent paperwork that indicated the sale had gone through. The buyer, however, has denied the claims.
With the Block NZ set to return to screens this year, OneRoof wanted to know if such a scandal could occur in New Zealand, and asked some of the country’s leading auctioneers for their thoughts.
The winning Block Australia house was forced to go back on the market. Photo / Channel 9
Ray White chief auctioneer John Bowring, who’s been involved with The Block NZ, told OneRoof that of the thousands of auctions he had called, not one had fallen through because a buyer did not pay up.
However, he did say that financial woes can derail sales, and not just those done at auctions. “Some [buyers] might lose their deposit,” he said.
In New Zealand, a winning bidder will sign a sale and purchase agreement after the auction is completed - a legally binding contract between the buyer and the vendor.
The agreement will usually state when the deposit is to be paid, and according to the Real Estate Authority, if the deposit has not been paid by the agreed time, the seller’s lawyer may inform the buyer that they have three working days to pay. "If you do not pay the deposit in that time the seller can cancel the contract at any time by serving notice of cancellation on you. However, if you pay the deposit before that notice is served, the agreement will not be cancelled, even if they serve the notice on you," the REA states.
Bayleys auctioneer Sam Steele told OneRoof that while he hadn't had experience of a buyer pulling out of deal at the deposit stage, he did know of “scenarios when someone has paid the deposit, signed the contract and a couple of month later when it came to the settlement time, they failed to settle”.
Steele said that most buyers who attend auctions were serious about the proceedings and would do their due diligence and homework. “The way a auction works is that if you put your hand up to bid, you’re saying that you are going to proceed with the sale and buy the property.”
When the property doesn't sell to the winning bidder things can get complicated, Steele said, and legal action can be taken if the winning bidder fails to pay up.
Harcourts chief auctioneer Aaron Davies said failure to pay was very rare, but there are options available to sellers. “If someone hasn’t paid the deposit, the agent can sell it to the underbidder,” Davies said.
