Read Time: 3-4 minutes
On the surface, an auction agreement and a standard sale and purchase agreement look similar, but hidden within them are key differences that can significantly impact buyers... and it's not the fact that auction agreements are unconditional.
Today, I’ll break down two major differences you need to be aware of before signing.
If you don’t understand these key differences, you could:
⚠️ Lose your deposit immediately under an auction agreement.
⚠️ Forfeit your right to challenge title issues, which could leave you stuck with unexpected problems.
These agreements remove protections that exist in standard contracts, making it crucial to know what you’re signing.
Here’s how the two key differences play out in practice:
As mentioned earlier, auction agreements are always unconditional, meaning you cannot include conditions like finance or due diligence.
To protect yourself:
✅ Understand deposit terms before signing an auction agreement.
✅ Know that auction agreements remove your ability to challenge title issues.
✅ Consult a lawyer first.
✅ Be aware that auction agreements are unconditional — no backing out later.
✔ Auction Agreement: Deposit due immediately — no second chances.
✔ Standard Agreement: Deposit due after conditions, with a 3-day notice period.
✔ Auction Agreement: No ability to challenge title issues (high risk for cross-leases).
✔ Auction Agreements are unconditional — no finance or due diligence clauses allowed
