Buying a property at auction
The main attraction of buying at auction is that you avoid the conventional drawn out process of purchasing a property. A variety of properties can be purchased at auction including residential, commercial, plots of land and freehold investment properties.
When preparing for auction it is important to consider the following points:
- Contact the relevant auction house and request their catalogue. Most auction houses hold regular auction sales with a catalogue printed some weeks in advance. You can also subscribe to catalogue mailing lists. Most auction houses now publish online catalogues too.
- Go through the catalogue carefully, read the details thoroughly and identify the properties you are interested in.
- Arrange a viewing of the lot(s) – viewing arrangements will be listed in the catalogue. If possible, arrange for a valuation of the property in order to identify any structural issues and of course to ascertain the value of the property.
- Research the property thoroughly and ask local estate agents and neighbours for their opinions.
- Carry out the usual property searches. These may be provided within the legal pack which is provided by the auctioneers.
- Carefully read the conditions printed in the catalogue. Always obtain legal or professional advice from a solicitor who should peruse the legal pack to ensure the seller has a good and marketable title.
- Make financial arrangements to ensure you have a 10% deposit ready for payment on auction day, when the contracts are signed and access to the remaining 90% within 28 days.
- Plan ahead if you need mortgage assistance. It’s wise to arrange a mortgage in principal with a bank or building society before buying at auction. You could lose your 10% deposit if you fail to complete within the time given.
- Be aware that buying at auction is a binding commitment and carries the same legal implications as a signed contract.
Auction day
- Remember to take two forms of identification, two utility bills, cheque book and all your banking details with you to the auction.
- If possible, arrive early and familiarise yourself with the auction room.
- On arrival, you may need to register with the auction house in order to bid prior to the start of the auction. Check with your auctioneer.
- On arrival, ensure you obtain a copy of any addendum sheet which contains late information or alterations in respect of the lots. Do not assume that all the properties included in the catalogue will be offered on the day of the auction. Some may be withdrawn or sold prior to the auction.
- Take a seat or stand somewhere in the room where the auctioneer will able to see you bidding clearly.
- When placing a bid, make sure you gesture clearly at the auctioneer. Subtle twitches will not be picked up. Either raise your hand or nod/shake your head clearly. The auctioneer will warn the room when he is concluding a sale.
- If a property fails to reach its reserve price contact the auctioneers following the auction. The vendor may decide to accept your bid later at the end of the auction. Make sure you leave your details with the auctioneer.
- The property becomes the buyer’s insurable risk as soon as the hammer falls. You will therefore need to arrange for Buildings Insurance following the auction. The conditions assume that the buyer has acted like a prudent buyer.
If you would like any more information in relation to this article then please feel free to contact me via email: huseyin.youssouf@bowlinglaw.co.uk or visit my profile.
