Property auctions are becoming more mainstream as buying a house at auction filters out the lengthy and uncertain buying procedures. According to statistics from The Auction Finance, the number of properties sold at auction rose by 78% between 2003 and 2004. The main attraction of buying at auction is that you avoid the conventional drawn out process of house buying. At auction, it is condensed into a matter of minutes rather than months and when the hammer falls, you own the property. Auctions are great for people looking for unusual properties that estate agents wouldn’t know how to sell, and if no one else has noticed its potential, you could find a bargain. However, it is crucial to note that purchasing property at auction still involves legal procedures, and it is advisable to seek the assistance of our residential conveyancing solicitors.
Then again, auctions are not just for the experts with insider knowledge. Over the past decade they have become increasingly popular with buyers who want to avoid the traditional house buying chain. At an auction, the sale is agreed as soon as the hammer falls, so there is no risk of everything falling through at the eleventh hour. In addition to this, you are aware of all the other bids as and when they are made so there is no chance of receiving a nasty shock and there’s a lot less that the estate agent can hide from you.
Lucy from Homes Under Hammer has a fantastic guide on buying at auction, she says:
DO contact the auction house beforehand and request their catalogue.
DO go through the catalogue carefully, reading all details
DO arrange a viewing
DON’T forget to research the property thoroughly
DON’T forget the refurbishment costs
DO carry out the property/land searches
DO contact a solicitor to go through all the fine print of the catalogue
DO make financial arrangements to ensure you have a 10% deposit ready for payment on auction day, when the contracts are signed and access to the remaining 90% within 28 days.
DO plan ahead with mortgage assistance
DON’T forget that buying at auction is a binding commitment and carries the same legal implications as a signed contract by private treaty
DON’T go ahead with the sale without speaking to your solicitor first.
There are also additional costs to buying at auction. There is usually an administration fee which is typically between £200- £300 and you are still required to pay stamp duty, insurances and your solicitor’s fees.
The only part of buying at auction which requires your full attention is the legal pack which needs to be carefully scrutinised. Ackroyd Legal have a specialist department on Auction properties, as well as a specialist team of residential property solicitors that offer a unique and tailored service to clients looking to purchase property and land in the UK. Head of Auction Property Mr Moorthy comments “what people often overlook is the local authority and environmental searches done for the property, it’s one of the factors which when addressed properly, are often deal breakers”.
If you need advice on properties bought at auction or help on going through the auction property legal pack please feel free to contact our highly motivated team on firstname.lastname@example.org or call us on 020 3058 3363