Step by Step Guide to Buying Property at an Auction
17th February 2015
At BTTJ we assist many clients to purchase a property through an auction. There can be some pitfalls involved with buying at auction and so to avoid being “stung”, please read our article on what to look out for.
If you have seen a property you like, contact the auctioneers and request their catalogue. These should be available online too.
2. Legal Pack
Download the legal pack on the property or get the auctioneers to send you a copy of the legal pack. It includes a copy of the title and official boundary plan, along with all documents referred to in that title.
Searches of the property should be also included along with answers to a pre-contract enquiries questionnaire of some description. If the legal pack does not contain any of these items then we would not recommend that you bid.
BTTJ offer a pre-auction document checking service for a fixed fee. This is the best way to ensure that you are not buying a problem title. If you do go ahead and bid successfully then the fixed fee is carried forward and credited against the fees that we change you for the conveyancing work we do in connection with completing the sale.
3. Viewing Properties
View any properties you are interested in and take a copy of the official title plan with you to check the position and boundaries of the property. Check that the description in the catalogue is accurate. Have a survey done and ask questions at the agents.
Read the special conditions in the auction contract carefully. Many sellers insert provisions into the small print requiring you to pay a large sum towards their “costs”. It is usual practice for the conditions to require you to re-imburse the seller for the costs of the local searches.
Watch out for payment of any arrears of rent or service charges on completion. Do not accept a condition where the seller is trying to bring forward the completion date, the standard completion date is 28 days from the auction.
Have a 10% deposit ready for payment on auction day. You must pay the full 10% on the day, and have access to the remaining 90% within 28 days. If you successfully bid at the auction and then cannot get the mortgage finance you will end up losing your deposit.
You will in all probability have to pay a Buyer’s Premium to the Auctioneers in addition to the purchase/bid price. Check the contract or ask the Auctioneers about how much it will be.
Be aware that buying at auction is a binding commitment and carries the same legal implications as exchanging contracts in a private sale.
6. Post auction
Take the signed auction contract home with you and hand it over to your solicitor as soon as possible after the auction so that they can complete the legal formalities.
REMEMBER ID-YOU CANNOT BID OR BUY A PROPERTY WITHOUT IT.
Please contact us on 02476 531532 if you wish for us to assist you with your purchase, or any conveyancing matter.