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At Emmersons Conveyancing Solicitors our Property Team deal with Auction Properties on a daily basis. You will have watched Homes Under Hammer, but did you know that a Specialist Conveyancing Solicitor has a lot of work to do, very quickly, to enable you to become the owner of an Auction Property?
It has come to my attention that the auction process can be confusing. Buying at auction can be the perfect way for a First Time Buyer to snap up a bargain, however, there are a number of things you need to be aware of before the gavel goes down.
You must ensure that you read through the legal pack carefully and visit the property before the auction. Don’t be taken in by the guide prices as these are just a guideline, especially if there is more than one party interested in the property. Work out what you can afford and what your highest bid will be then stick to that.
If you are interested in the property then have a solicitor review the legal pack to ensure there is nothing too onerous or something which may prevent a lender from lending money against the property.
If you are not a cash buyer and are relying on mortgage funds it is advisable to start the mortgage process quickly. It is one thing having your agreement in principle and another to have your mortgage offer in place, it can take a lender quite some time to issue your mortgage offer. It is sensible to begin any surveys or valuations required by the lender as soon as possible
It is important to be aware of what type of auction the property is being sold under. A standard auction (sometimes known as Type 1) or a “Modern Auction” (sometimes known as Type 2)
In a type 1 auction once the gavel goes down you have exchanged contracts and a 10% deposit must be paid alongside any auction fees. You will be contractually bound to complete your purchase, usually within 28 days. Be aware that most contracts which are signed contain a clause which states the buyer(You) will accept all auction terms and any special conditions.Some special conditions our Conveyancing Specialists regularly deal with are a fee to be paid to the seller’s solicitor for the drafting of a legal document and a fee payable for the searches provided by the seller (if any). This is something to be aware of when you are working out what you can afford to buy as you will be contractually bound to pay those fees.
In a type two auction once the gavel goes down a reservation fee will be payable alongside any auction fees. You then have 28 days to exchange contracts with a further 28 days to complete the purchase. This type of auction is a little bit more flexible, as any extension of time can be agreed between the parties prior to exchange. Once your bid has been successful it is now down to the seller’s solicitor to promptly issue contract papers and your solicitor to ensure you are ready to complete your purchase within the required timescale.
Buying a property at auction can be very fast paced and stressful in the short term, however, there is a clear benefit to the buyer as they know the property will be theirs within a set period. If you have any queries about buying a property at auction do not hesitate to contact us.
We do hope the above has helped clarify a very important part of a the Auction process for residential property. If you would like any further information about our Specialist Conveyancing Services or you would like a FREE Fixed Fee Conveyancing Quote, then please do not hesitate to contact us on:
Our Gosforth ofﬁce is located at 137A Back High Street NE3 4ET - call in and see us at any time. We have wheelchair access, you can be dropped off at our front door, and there is free parking on the adjoining streets.
You can also park opposite our Sunderland Office on John Street.