Auction Purchases and Sales

Auction Purchases

Buying property at auction is becoming increasingly popular. In fact the latest figures, dated December 2017, showed an increase in the amount of property sold annually at auction – up to almost £530 million of which most (over £340M) was residential property.

Why the increase in property sold by bid? The state of the economy, and the property market in particular is the biggest driver. But in the long term, amongst the factors affecting auction sales are a combination of an increase in social mobility coupled with much higher levels of home ownership have resulted in more and more people inheriting property from relatives living miles away. In such circumstances, it can prove very difficult for the owner to organise a local house sale and in particular to show any property to prospective purchasers – so selling the property swiftly in this way often fits the bill.

There can be some real bargains, but with high reward also comes higher risk and it is vital, whether buying or selling at property auction, that you have the backup of an experienced property lawyer with genuine experience of property auction transactions.

Looking to buy property at an auction? Our specialist property department can help.

We offer a fast and experienced service for buyers to check the auction pack and special conditions.

Our property auction lawyers and solicitors have extensive experience of acting for clients both buying and selling commercial and residential properties at auction.

At a property auction, contracts are legally exchanged, and both seller and buyer commit immediately the reserve price is met and the auctioneer accepts the highest bid (usually a 10% deposit must be paid on the day). Consequently, a sensible buyer and his/her conveyancer will have undertaken all the necessary checks and enquiries before the day of the property auction.

The Auction Pack

The pack should include (where applicable) copies of :-

  •          special conditions of sale
  •          title deeds
  •          leases
  •          office copy entries
  •          searches
  •          replies to pre-contract enquiries.

Completion and arranging a mortgage

This is another reason why you need a solicitors auction report on title. It can be a false economy if you don’t carry out a title report or survey before an auction. Admittedly you would have to pay for these whether or not you were successful in bidding for the property. But many buyers who don’t get a title report first end up having to buy a property with a bad title – sometimes one on which it will be impossible to get a mortgage.

Practical considerations for buying at property auction

  •  Arrange an inspection or preferably a survey of the property prior to auction
  •  Check comparable property sales of the same type in similar area as recently as possible
  •  Double check whether VAT is payable on the purchase with commercial property
  •  Ensure that 10% deposit is available in clear funds
  •  Decide whether extra searches are advisable and if any of the information or searches provided by the seller out of date
  •  Consider whether replies to enquiries satisfactory or are there areas of concern
  •  Ensure funds are available to complete, if mortgage needed, whether survey position is important and whether the mortgage in principle is enough
  •  If the property is tenanted check all paperwork and status of tenancy and underlying tenancy documents

Our fees

Our specialist team offer fixed prices for reviewing the legal pack prior auction, where the auction is more than 7 days ahead. For more urgent work, contact us for a quote.

If you are successful at auction we will finish your conveyancing and your auction fees paid to us will be deducted from the rest of our fees.

Please contact the team to discuss your property purchase by auction and to obtain a bespoke estimate of fees:

Buy an auctioned property

Auction Sales

Looking to sell property at auction? Our specialist property department can help. We provide a fast, experienced, service for sellers to the preparation of legal packs.

We will prepare the auction pack for you to send to the auctioneers. The pack will usually include the following:

  1.         Special Conditions (the contract) and your replies to some standard forms.
  2.         Searches
  3.         On a leasehold property, obtaining a Leasehold Management Pack from the freeholder.

The Leasehold Pack would include service charges, buildings insurance and other information.  Although there are costs involved in obtaining searches and replies from a freeholder, it is standard for the special conditions to provide that a buyer will reimburse your costs on completion.

Similarly, with regard to our legal fees for dealing with the sale (once the property has successfully sold), it is usual for the Special Conditions of sale to provide that these will be payable by the Buyer. You would appreciate that to allow sufficient time for searches and the Leasehold Pack to be obtained it is important to contact us as soon as possible if intending to sell at auction.

Please contact the team to discuss your property sale by auction and to obtain a bespoke estimate of fees:

Auction my property

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