The trend for the sale of properties by public auction continues to grow with various auction houses advertising the sale of properties on an almost monthly basis.
While these sales appear to be very tempting, the rule “Proceed with extreme caution” still applies and the following is a short guide if you are considering buying at auction.
The most important thing to be aware of is that if you buy a property at an auction you sign the contract on the day of the auction and you pay 10% of the purchase price as a deposit.
It is not possible for you as a purchaser to amend or negotiate any of the terms in the contract for sale on the day of the auction. It is not possible for you to make your purchase conditional on loan approval. This means that you must have the funds available to you to complete the purchase or alternatively you must have made arrangements with your lender so that loan funds will be available once you sign the contract at auction.
Once signed, it is not possible for you to withdraw from the contract for sale if for any reason you do not wish to proceed with the purchase.
TIPS prior to the auction……
View the property
If the Auctioneer has not arranged a group viewing of the property, please make the necessary arrangements by contacting the Auctioneer to view the property at least once.
It is essential that you know the condition of the property ahead of the auction.
Standard advice I know, but you’d be surprised how many people do not see the property ahead of the sale and are disappointed afterwards, with little options open to them.
Obtain legal advice
It is important that you obtain independent legal advice before bidding.
The vendor’s solicitors prepare legal packs containing all relevant documentation. These legal packs should be passed to your own solicitor for their legal opinion before you attend the auction.
Your solicitor will help you make an informed decision about the sale and any possible issues surrounding it.
Obtain a survey
When you purchase a second hand property you purchase the property as you find it. It is important to have a survey done by your engineer prior to auction.
If you need to arrange a mortgage it is important that you obtain an offer from your lender before the auction day. You will usually need to complete your purchase in five weeks after the auction. You should discuss this with your lender to make sure that this will not be a problem.
Understand all terms and conditions
Buying property at auction is different to buying property privately and it is strongly advised to all potential purchasers to check that they have read and understood all the various legal documents and terms & conditions.
Proceed with extreme caution!