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People buy at auction for lots of reasons, they may want to move quickly or they could be looking for a plot of land to build on, a repossession, or quite simply they want a quick purchase without the risk of gazumping..
They may want something really unusual that's not normally sold through an estate agent or just want to find a home to live in. Also, many buy-to-let investors buy at auction as a catalogue full of properties gives them lots of opportunities to choose from. It does't matter what your reason for buying at auction is, the key to success is preparation.
Finding the right property
Before you go to auction to buy a property there's a lot of groundwork that needs to be done. A good place to start is by making a list of must haves. It could be a particular area, whether it's detached or semi-detached, the number of bedrooms, the price range, whether it has space for parking or any number of other reasons. Once you have an idea of what you want to buy you're ready to start your search.
Where to look
There are lots of places you can start looking, the Internet, auction catalogues, property supplements, regional and local papers, free papers and by contacting auction centres.
The quickest way to get a copy of an auction catalogue is to subscribe to the mailing list, this way it will be sent the day it is produced.
You'll be one of the first to see it and it will give you plenty of time to complete your enquiries before the auction.
Offers prior to auction
You can submit an offer before the auction which, if suitable, is forwarded to the seller. If this is accepted, your purchase will go ahead and when contracts have been exchanged, the property will be withdrawn from the auction.
Auction Day
This is by far the most exciting part of buying or selling at auction.
But make sure you're prepared. Before the auction, contact the auction house just to make sure the property is still available.. You're now ready to start bidding!
What do I need to bring?
You'll need two forms of identification, your auction catalogue, your solicitor's details and your deposit, because if you are successful you will need to pay this when contracts are exchanged which happens on the fall of the hammer.
It's also a good idea to arrange for your buildings insurance policy to start once the hammer falls. For some leasehold properties this might not be necessary, your solicitor will tell you this.
Your deposit
This can be a banker's draft, a building society cheque, or a personal cheque.
At some auctions there may also be a contract documentation fee, which is usually around 400 pounds plus VAT.
Bidding
Before bidding begins the auctioneer will check that everybody has a copy of the 'Addendum or Announcement' sheet and will read out any last minute alterations to the catalogue details.
When the property you are interested in comes up, make sure you know the maximum price you can afford to pay - it's easy to get carried away!
Once bidding begins, potential buyers will be asked to make their bids clearly either by raising their hand or a copy of the auction catalogue. And don't worry, you can't buy a property by scratching your head.
Once the final bid has been put forward the auctioneer will signal that it is about to be accepted by using the phrase 'going, going, gone' and bang the hammer to close the sale.
If a property fails to reach the reserve price, it will be withdrawn from the auction and the auctioneer will invite anyone still interested to talk afterwards. Sales can still be made if a price is agreed with the seller.
What if I can't attend?
If you can't attend then you can arrange for someone to submit bids on your behalf.
They'll need your written consent and you should agree limits before bids are submitted. If you want someone from the auction team to do this you should contact them at least two days before the auction.
You could also submit telephone bids to a member of the auction team who'll be in the auction room. They'll then make bids on your behalf. However, attending the sale is by far the best way to bid. If you bid by phone you'll miss out on the exciting atmosphere in the room.
You've Done it!
Once the hammer falls, contracts are legally exchanged. The contract is signed and the deposit handed over immediately. The auctioneer is legally entitled to sign the contracts on behalf of the buyer and seller if necessary..
Completion of the sale
The completion of the sale takes about 28 days, however for some properties this could happen sooner. This will be stated in the general conditions of sale in the auction catalogue or as a special condition of sale in the legal documents. The balance of the sale will be paid on completion. A solicitor will normally deal with this part of the sale. |
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