Auctions are often efficient and economical platforms for buying or selling a property. The contract is completed at the close of bidding, so the process can be far quicker and less complicated than other property transactions. However, sales at property auctions are binding, so ensure you have proper legal guidance.
The legal paperwork required for buying or selling a property at auction as the same as that required for any other method of sale or purchase. Interested parties will get to review legal packs for each property shortly before the auction. These legal packs should incorporate every relevant detail about the property, including any covenants and restrictions. A conveyancing solicitor will help you to review these documents so that you know exactly what you’re buying before making an offer.
Alternatively, if you are selling a property, a conveyancing expert will help you prepare all the necessary legal paperwork to give to an auctioneer. Supplying clear, comprehensive details will make your property more attractive to potential buyers and avoid disputes after the sale is completed.
Buying at Auction
If you are considering buying a property at auction, you should attend a few auctions to familiarise yourself with the process. When you’re ready to attend as a bidder, read the legal packs carefully beforehand and get legal input so that you are aware of any potential problems as soon as possible. Remember, if you make a successful bid on a property at an auction, the sale is legally binding.
You should also get a survey carried out on the property to highlight any issues such as damp, rot, or structural problems. Your solicitor will advise on any searches that need to be conducted, so you know about any issues in the surrounding area that may affect the value of the property. These could include:
- Planning searches
- Land registry searches
- Judgment searches
Sales happen quickly at auctions, so sound legal advice is vital.
The Auction Process
The bidding at an auction is finished on the day and may take mere minutes. You will have had about a week beforehand to review the legal pack so that you can undertake any surveys and view the property. The contract is finalised once the hammer falls. The buyer then pays a 10% deposit, with the full amount payable on completion of the sale. The sale is often completed within 28 days.
Property auctions generally involve lower costs than other methods of buying or selling property. Your solicitor will charge a standard fee to review or prepare any legal packs before the auction. Both buyers and sellers must also pay a fee to the auctioneer when the bidding closes on a property. Other costs for bidders may include surveys and other conveyancing work.