Auction Properties – Not Always The Bargain They Seem!
Buying at an auction is not always the bargain that it might be. When buying at auction the same rules apply as with a more traditional house purchase - the purchase is at the buyers own risk and he must make sure everything is in order legally.
A buyer should do everything they would normally do prior to an exchange of contracts before the auction commences. Once your bid is accepted at auction you are entered into an immediate legally binding contract to purchase the property - irrespective of any issues that may exist.
Most auctions provide online auction pack which should be looked at very carefully by your Solicitor before you proceed. They will investigate the title and the searches that are there and will recommend to you further investigation if documents are missing or if there are concerns which may de-value what you are buying at auction.
We have many cases where clients have not realised that there are serious concerns in relation to the properties and they have saved themselves time and money by having the auction pack checked by us prior to bidding. Examples include searches not being included for the area local to you eg; in the Bury area and Bolton area mining searches would be needed or perhaps in other parts of the country being affected by the HS2 High Speed Rail Link. The contracts often asked to contribute towards the costs of the seller and these can be hidden in the auction contracts at the back of the special conditions. These can often add £500 to a couple of thousand pounds onto the price you think you are paying.
We recommend that if you are looking to purchase at auction you take some time to carry out some investigative work and check the area, and types of property you are looking at. Check the prices that they sell for in that area, visit the property and look at the area generally.
Once your bid is accepted you will have to pay a 10% deposit straight away and often produce evidence of your identification and you will normally have to complete within a 28 day period or maybe earlier. It is also imperative that you make sure you have funding in place before you bid to ensure that you will not be delayed past that date. If you are delayed past that date you can be asked to pay interest on the balance and potentially if you fail to complete you may lose your deposit and they can sell the property elsewhere.
In short - if you are interested in buying at auction - speak to the experts. Speak to us.
If you have any questions relating auction properties or the conveyancing process please contact Lorraine, Caroline or Fiona now on freephone number 0800 083 0815 or email: lorraine.webb@clough-willis.co.uk, caroline.rimmer@clough-willis.co.uk, fiona.jackson@clough-willis.co.uk
