Buying At Auction
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Why do you need a specialist solicitor when buying at auction?
Auction conveyancing follows a different process from usual residential property purchases, so choosing a solicitor who specialises in this area is essential.
Our auction solicitors at Davisons can advise you on all the important aspects of bidding at auction, helping to ensure that you make a sound investment. Any mistakes in auction conveyancing can mean you buy a property with significant problems. For example, there may be high ground rent to pay, or the property may have been extended or altered without planning permission.
We can take care of all the legal practicalities of the sale, from checking property ownership to arranging surveys and property searches. Our solicitors will thoroughly review the auction legal pack provided by the seller’s solicitors to make sure your interests are protected. We will make sure you are aware of any potential difficulties with the property or any sale conditions that may impact your investment.
Our friendly and knowledgeable auction conveyancing solicitors will give you all the guidance you need to enter an auction bid with confidence.
What is in your auction legal pack?
An auction legal pack, which can run into hundreds of pages, is prepared by the seller’s solicitor. The pack is usually available a few weeks before the property auction. It usually contains copies of the following documents:
- Energy Performance Certificate (EPC)
- Fixtures and fittings form
- Office copy entries from the Land Registry
- Planning permission documents
- Responses to conveyancing searches
- Property searches
- Special conditions of sale
- Title deed
It is often the case that properties are put up for auction because they are difficult to sell on the open market due to legal difficulties. The legal pack will often detail these problems, so it is crucial that an experienced auction solicitor checks it thoroughly. Your solicitor will check the small print for hidden covenants and loopholes.
Mistakes with the auction legal pack can mean you pay more for a property than it is worth. It can also mean you are stuck with a property you cannot sell without making a significant loss.
How does the auction process work?
These are the steps you will typically follow when buying a property at auction:
Find a propertyTo find auction properties, you can use residential property portals such as Zoopla. Once you have found a property, it is advisable to check out the local area by talking to estate agents and visiting the area yourself. If you are planning to rent out the property to students, for example, is the area near to a university? Would the local facilities appeal to students?Before bidding on a property, ensure the auctioneer is regulated and holds the NAVA property mark.
View the propertyWhen you view a property, consider taking an expert such as an architect, builder or surveyor with you to find out how much work is likely to be needed. It is worth noting that mortgage lenders will only lend on homes with a functioning bathroom and kitchen.
Plan your financesMost properties sell for more than the guide price, so plan your finances realistically. You will likely have to pay a deposit or a reservation fee on auction day, so you will need money ready for this. It is vital to have a mortgage in principle (AIP) in place before you bid at an auction.You will need to factor in the costs of buying a property, such as stamp duty, professional fees (solicitors, estate agents, surveyors), and the cost of renovations.It is a good idea to set yourself a bidding limit – and stick to it.
Instruct a specialist auction solicitorInstructing a specialist auction solicitor early means you receive all the essential practical and legal advice you need to make a purchase decision. You can also complete all the initial legal paperwork, such as proof of identity, so you are ready to hit the ground running.The traditional auction conveyancing process is fast, so finding an auction solicitor early is advisable. Once the auctioneer’s hammer falls, you are legally bound to buy the property. You will pay a deposit for the property on the day and may have just two weeks to pay the final balance. Contracts are exchanged on auction day.
Ask your solicitor to check the legal packYour solicitor will examine the legal pack prepared by the seller’s solicitor. They will also check the auctioneer’s terms and conditions. Our auction conveyancing solicitors will make sure you understand all the implications before you sign a contract with an auctioneer, so there are no surprises later.
Organise a surveyThere are different types of surveys for you to choose from. A Homebuyer’s Report may not be detailed enough if the property is in a poor state of repair. Although a survey is not a legal requirement, it is a good idea to enter an auction with your eyes open.If you need a mortgage, your mortgage lender will carry out a property valuation. However, this valuation is not thorough. An RICS qualified surveyor will give you an idea of the real value of the property and tell you what renovations will be needed.
Organise insuranceA property is your responsibility from the moment you exchange contracts. It is essential to make sure you are ready to put building insurance in place immediately in case the worst happens.
Have any questions or need any help?
Our team of specialist lawyer are experts in their field. Be confident in their advice and decisions to help get the right outcome for you. Contact us today to see how we can help