When it comes to property transactions there is nothing quite like the excitement of auction sales. Preparation is the key to buying at auction and our experienced team can support you at every stage.
Whether you are a buyer or a seller, you will need to consider carefully whether an auction sale is the right approach.
Considerations when buying at auction
- Is the finance in place to complete the purchase? If you make a successful bid you are bound to buy the property. If difficulties are experienced in arranging, for example, mortgage finance you run the risk of losing your deposit. Always have the finance in place prior to the auction so that you can not only be sure that the finance is available but also that there are no conditions in the mortgage offer which would hamper the purchase. The lender will in most cases require a valuation before it makes a formal offer.
- Have you had a survey carried out? Under English Law the principle “buyer beware” applies. You take the property as you find it. Any issues you discover after the auction will not allow you to withdraw from the deal.
- Are there any legal problems? An auction pack (including a copy of the contract, the title documentation, the searches and replies to general enquiries) should be available before the auction. Ensure this is reviewed by a conveyancer prior to buying at auction. Once again if you buy and there are problems, you take subject to those issues.
- Have you decided upon the maximum price you will pay? Set a limit and stick to it.
- If the property is desirable there is a good chance that you may not be successful. You may consider that the costs incurred in arranging the mortgage, having a survey carried out and having a preliminary meeting with your solicitor are wasted. You need to weigh this up against the possibility of being successful at auction and buying a property with defects which could have been discovered.
Considerations when selling at auction
If so, you may have been advised by your estate agent to offer the property for sale by auction.
For a fixed fee, we can prepare an auction pack for you and ensure that all of the legal documentation is available to the prospective purchasers in good time for the auction. We will also deal with any legal enquiries raised by prospective purchasers prior to the auction.
Special conditions that you wish to impose on the purchaser will need to be contained in documentation. For example, you may want your search fees reimbursed by the buyer on completion or you may want the buyer to construct a fence within a defined timeframe following the auction. We will discuss these with you prior to finalising the pack and make sure that they are included in the auction contract.
When a property is sold by auction, the highest bidder on the day will obtain the property, provided that the bid is higher than the reserve price (the lowest price at which you would be happy to sell) that you have agreed with the auctioneer. Completion will take place on a fixed date, usually 28 days following the auction
Many clients find selling at auction an exciting time. If there is a lot of interest, you may achieve far more than the guide price for the property or the reserve that you have imposed. However, if there is no interest or the reserve is not met, you may not sell the property on the day of the auction and you will have to reconsider your sale strategy.