Auction Guidance For Buyers
- Prepare well in advance.
- Obtain a copy of the auction catalogue as this will often contain more background information on the Lot. The property description will normally form part of the contract between you and the seller, as will the General Conditions of Sale which usually appear in the auction catalogue.
- Check the guide price for the Lot in which you are interested. This will often provide an indication of the reserve price set by the seller and you should ensure that this price is within your budget.
- Seek legal advice in respect of the Special Conditions. Particular points to look out for are particularly short completion dates (28 days is standard) and contributions to the seller’s costs, often expressed as a percentage of the sale price. It is usual to be required to reimburse the cost of any searches and title documents provided by the seller. Other technical provisions may exclude rights you may otherwise have or impose additional liabilities so beware.
- Obtain and seek legal advice on the Legal Pack. This should be available from the auctioneers and is sometimes downloadable from their website. This is not always complete and often matters need clarification by the seller or their solicitor, however on some occasions you may find that additional information is not forthcoming.
- If you need further information from the seller’s solicitors do not leave it until the day of the auction!
- View the property– unless the Lot is open land and freely-accessible, most auctioneers have specific times and dates upon which the property may be viewed.
- If you require finance arrange this in principle prior to the auction. Ensure that your lender is aware that a valuation will need to be undertaken at short notice and is capable of arranging this. Any offer should be checked to make sure it does not contain conditions which you may not be able to fulfil.
- A survey result is rarely provided by the seller accordingly you should consider arranging for a survey to be undertaken prior to auction. Again you should check with the auctioneers to arrange for access. Clearly if you are not the successful bidder then the cost of the survey will have been wasted and that is your commercial judgment to make.
- If successful, you will usually be required to insure the property from the auction date and accordingly you should arrange for this to be organised in principle prior to the auction so it can be put ‘on risk’ immediately.
- Listen for any announcements made prior to the Lot being offered. This may indicate any amendment to information previously available, for example to correct printing errors or to take into account revised information. There may also be written copies of any amendments available from the auctioneer on the day of the auction.
- Check the auctioneer’s requirements following a successful bid – this commonly includes payment of the deposit (usually 10% of the price) in cleared funds and proof of identification. There may also be an administration fee.
- Lots can be sold or withdrawn prior to auction and accordingly you should check with the auctioneer prior to travelling.
The fall of the gavel constitutes exchange of contracts. If your bid is successful then you will be bound to complete the purchase. If you do not complete in accordance with the contract then you risk losing your deposit and may be liable to the seller for any loss, for example if the property is subsequently sold at a lower price.
The above is intended as general guidance as to some of the issues and practicalities of buying property through auction. It is not comprehensive and specific advice should be sought in respect of individual properties. For further advice or information please contact Gemma Wright.