Buying Property At Auction

Are you ready to purchase your first property from a property auction? If not then this buyers guide to property auctions is a good place to start to familiarise yourself with the auction buying process.

When trying to come up with the most useful way to set out this guide, we tried to think about that someone who is starting out would want to know. For this post, we thought we would keep things simple and outline three stages of the buying process and list the things you should keep in mind.

So we feature in this guide the steps your need to undertake

• Prior to Auction Day
• On the Day
• After the Hammer Falls.

What To Do Prior To Auction Day

So, you’ve found an investment property that you like, what do you do next? Do you know who the auctioneer is that is handling the property sale? If you do, then first things first, get a hold of their auction catalogue and look at the information they have printed about the property.

Get the Viewing schedule and go take a look at the property in person. Carry out a visual inspection, checking for things like damp, electrical, central heating, windows, roofing etc.

A local builder could perhaps give you an idea of things that might require attention at this early stage.

If you are still interested in bidding on the property, then you should take a look at the legal pack to familiarise yourself with any unusual terms or covenants that may be attached to the property. If possible it is advisable for your solicitor to take a look at the legal pack which will contain details of the deeds, any planning consents, searches, special conditions of sale etc.

Arrange a survey for the property. The auction process is a fast moving one with deals completed in less than 30 days in most cases. Chartered Surveyors who deal with auction properties are used to carrying out inspections and producing structural surveys in enough time for you to arrange the finance you may require to complete the purchase.

Arrange your finance. If you are not buying the property with your own funds, you will need to have your finance in place to cover the purchase price and any fees due on the day.

Register your interest in the property or lot with the Auctioneer, that way you will stand a better chance of being kept informed of any changes that may occur with the lot prior to sale day.

What To Do On The Day

Get to the auction room early and familiarise yourself with the room. Also check to see whether any of the information relating to the property you want to purchase has been updated or changed.

Ensure you have your deposit and identification with you. You cannot pay your deposit in cash or using a credit card. You can however pay your deposit using a personal cheque, bankers draft or company cheque.

Don’t forget your ID. You must have proof of who you are and where you live in order to make a purchase.

What To Do After The Auctioneers Hammer Falls

Wow, you’ve been successful and done your homework and bought your first auction property. If you are the highest bidder and the auctioneers hammer falls you become the legal owner responsible for the property.

This means you will need to insure the property immediately against damage and to prevent loss of your investment.

You will be invited to complete the details of the sale by paying your deposit (usually 10% of the purchase price) and any fees. The contract exchange takes place there and then and the deal is expected to complete usually within 21 days at which time the balance of monies due must be paid.

This completes a brief look at the property auction buying process that operates in England and Wales. Buying property in Scotland there is a slightly different process. In later posts we will go into more detail about some of the terms contained within this one, however if you need further information, contact the auctioneers direct, they will be happy to give you more detail about how they operate.

It’s a good idea to go along to a few auctions and get a feel for what goes on in the room on a sale day.

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