How to buy at Auction
Buying property at auction can be both a great way to grab a bargain and an exciting event in its own right. However, you’d be wise to protect yourself from getting carried away on the night by ensuring you research and prepare thoroughly.
Here we provide some guidance to help you throughout the auction buying process
First things first -
Ensure you conduct thorough research in advance because your preparation, prior to the public auction, will allow you to make sound judgements on the night. Buying at auction can certainly be a fast way to acquire property as the legal transaction will usually be completed 28 days after the auction takes place, but without the correct pre-planning, it may not work out the way you’d like. Auction decisions need to be made quickly and this comes with pressure to know what you’re doing and to react according to your plan.
You’ll need to identify auction houses that cover the geographical area you are interested in. Most auction houses run fairly regular events and you can normally sign up for their news updates or to receive a copy of the auction catalogue once it has been printed. Study the information provided and ensure you are fully aware of what’s for sale.
You’ll be bidding against other potential purchasers who will have carried out their research so don’t be left behind.
Before the auction -
Once you have identified the property you are interested in, arrange viewings with the agent and ask them for information about the area and the type of house you’re viewing. Do your homework and review the legal packs as soon as they are available. The legal packs should contain the title deeds, up to date searches plus the list of fixtures and fittings to be left in the property.
Our team of specialist property lawyers can assist you with that review for a fixed fee.
Having your finance in order is absolutely vital. Should you win the bid you are legally bound by the auction terms you signed on arrival and as such a 10% deposit (10% of the purchase price) will be payable before you leave the room. At this point, you will have exchanged contracts and will not be able to withdraw from the purchase without great expense to yourself. As a minimum, your deposit monies are at risk if you do not complete when required to do so.
Furthermore the remaining 90% of the price will usually become payable within 28 days, so having your funds organised beforehand is of paramount importance.
What happens on the night –
You’ll need to register with the auction house on arrival and you’ll be given a bidding number or ‘paddle’.
Part of the registration process will be to review and confirm your identity so ensure you have read and understood the Auctioneer’s terms in order to provide the correct documentation to allow you to take part in the auction.
Remember that you’ll need to provide a deposit of 10% of the sale price on the night and you will be asked to prove you have the funds readily available.
Also set your bid limit and stick to it. Know what you can afford and don’t get carried away!
What happens next?
Once you have successfully purchased your property you will usually have 28 days until the completion date so you’d be wise to use a specialist conveyancer who can work efficiently and quickly and help you to achieve your deadlines.
If you have additional questions about the property auction process we’d be delighted to help so please
Posted by Insight Law on
21 June 2018
Commercial, Guide, Residential