Buying or Selling at Auction- What you need to know
If you have a property that you have inherited or own a property that has become a little run down or simply need to achieve a quick sale, placing your property in auction can be an attractive prospect.
Here is what you need to know:
- Estate Agents should give you an indication of their fees which often include auctioneers costs.
- An auction date should allow your solicitors enough time to put the auction pack together including obtaining search results, title deeds and other relevant documents. The auction pack should be with the auctioneer’s agents some time before the auction date to allow prospective bidders at auction the opportunity to inspect the documents and raise any queries in advance.
- Timescales to completion can vary but generally these tend to be 28 days from the date of the auction although this can be brought forward if both buyer and seller are willing and able.
- It is important to ensure that, your reserve price is sufficient to discharge any financial charges secured against the property. Otherwise you can make up any shortfall from your own funds on the date of completion. It will be your obligation as seller to ensure that any financial charges are removed from the deeds on completion.
Of course, auctions are not exclusive to sellers and a budding purchaser may be looking for that investment bargain or new potential home.
- 10% deposit is payable on the day of the auction. The balance needs to be with your solicitors as cleared funds by the date of completion. It can be a risky business aiming to acquire a property at auction if a buyer is reliant on obtaining Mortgage finance on that property as the time to completion starts ticking once the hammer falls.
- As a buyer you may be expected to reimburse the seller on completion of the cost of searches included with the auction pack. Also be clear on any hidden auction costs.
- Know what you’re buying. There are many reasons why a seller would place a property into auction and one of those reasons can be that there are issues on the title that would create issues in a standard sale transaction. Take advice from an experienced conveyancer prior to the date of the auction and perhaps ask them to glance their eyes over the auction pack and comment on potential issues they see.
- Surveys should also be undertaken or at least considered before you are committed to the purchase and building defects would also pass to a buyer on completion.
Our residential conveyancers Alison Mason, Adam Fletcher, Ashley Sowerby and Mark Thornton can assist in the preparation of an auction pack for sellers wishing to sell property in this manner and/or advise buyers prior to becoming committed to the purchase of a property at auction.
Our property team are highly experienced and recommended for the right reasons.
For assistance on a property matter call 01484 538 421