Sales at auction have increased and there are bargains to be had. But with high reward comes higher risk and it is vital, whether you are buying or selling, to be well prepared. Richard Temple has specialised in auction sales for many years and has extensive experience of buying and selling both residential and commercial properties at auction.
At an auction bids are placed and the contracts are exchanged immediately that the reserve price has been met and the auctioneer accepts the highest bid. The buyer and the seller are both committed and there can be no change of minds and no re-negotiation of the price.
Selling at Auction
Properties sold at auction may include those requiring renovation, unusual properties which are difficult to value, conversions, commercial or tenanted properties and probate sales. Sellers range from private individuals and executors, investors, property companies and banks, to governments and local authorities.
When acting on an auction sale we will assemble a detailed auction Legal Pack and anticipate the possible concerns and enquiries of potential buyers. The auction Legal Pack is a collection of legal documents relating to the property being sold which is made available to prospective buyers in the weeks leading to the auction. The Legal Pack will include the Special Conditions of the sale and evidence of the seller's title, replies to standard pre-contract enquiries, relevant planning and tenancy documents etc, a draft transfer deed, search results and (where applicable) an EPC.
Prior to the auction we will reply to any enquiries that may be raised by prospective buyers and their solicitors and we will liaise closely with the auctioneers. Generally we will attend the auction itself to answer any last-minute enquiries that may be raised and, following the auction, we will deal with the necessary legal formalities to complete the transfer of the property to the successful buyer.
Buying at Auction
"Auctions are a good way to sell problem, or otherwise unsaleable, properties - so it's essential to do your homework".
Properties may be sold at auction because they have not, or will not, sell in the general market - often due to their condition and/or legal and other problems. Such problems should not be underestimated as they may affect the value of the property and render it uninsurable or unmortgageable. If a property at auction seems a bargain then there's probably a reason.
At auction a property is sold as seen and no warranties will be given by the seller. Before bidding you will need to have inspected the property and, we would recommend, to have had it surveyed. You will also need to have read and understand the legal documents and search results provided with the auction Legal Pack to ensure that, if successful, you know exactly what you will be buying. For example is the property being sold with full vacant possession or subject to a tenancy and will you be liable to pay VAT on the purchase price? Remember that you cannot alter the terms of the contract once your bid has been accepted and that the consequences of failing to complete are severe. As such we strongly recommend that you should always seek our advice before bidding for a property at an auction.
If successful you must have sufficient cleared funds available to pay the deposit (and any applicable fees) at the auction and to pay the balance of the purchase price on the completion date - which is generally 28 days after the auction. If you need a mortgage you will need to have ensured that the lender has issued you with a written offer prior to the auction. You will also need to have insurance for the property arranged.
In addition to the purchase price you will need to pay your own conveyancing and survey costs and the applicable stamp duty land tax. You may also be required to pay a buyer's premium and to reimburse the seller's legal costs and the search and auction fees. Details will be found in the Special Conditions of Sale and again we recommend that you should seek our advice on the Legal Pack prior to the auction.
For more details please contact Richard Temple
tel 01502 583621 or 07908 987 100