When most people buy or sell a property, the usual process is that an offer for that property is accepted, solicitors are appointed, the due diligence process takes place and once all parties are ready, exchange of contracts takes place with an agreed completion date.
However if a property does not sell, it may be put into an auction where a lot of properties are usually listed to be sold on that same day.
At an auction, a legally binding sale is agreed as soon as the hammer falls and purchasers have to pay a deposit 10% on the auction day. Should the purchaser withdraw for any reason then they will forfeit this 10% deposit. Purchasing at auction also provides certainty for the purchaser as there is less likelihood of the seller withdrawing or being gazumped by another interested party.
When buying or selling property at auction, the key is to prepare in advance.
If you are selling a property at auction, ensure you instruct a solicitor at least 2 months before the date of the auction to assemble an auction pack, which can then be made available through the solicitor or through the auctioneer. The auction pack will contain details of the title, copy of the Contract and a number of searches which any interested party can view so they can be satisfied with the title prior to the auction.
If you are considering purchasing a property at auction, our main advice is to do your research. Once you have found a property that you are interested in making a bid on, you should consider instructing a solicitor to review the information in the auction pack. You should also consider having the property surveyed so should you be successful at auction, you will know exactly what you are buying either legally or from a structural point of view.
Auctioneers will set a guide price for a property which is normally quite low to entice buyers. However any potential purchaser at auction should always set themselves a budget as it is easy to get carried away once the auction is under way.
You should also get an indication from the auctioneer as to what interest there has been in any particular property you are interested in.
Any potential purchaser at auction should also have their finances in place as if you are the successful bidder you normally have 4 weeks in which to complete the purchase when the remaining 90% of the purchase price will need to be paid.
For further information in connection with buying or selling at auction, please contact our experienced solicitors in our Property Department on telephone number 01267 237441 or by email at firstname.lastname@example.org who will be able to assist further.