Buying Property at Auction
Things to know about buying property at auction
Why auction is different
People buy at auction for lots of reasons, they might want to move quickly or they could be looking for a repossessed property, They may be looking for a investment, a second form of income, some quick profit or even a plot of land to build on.
Even quite simply they want a quick purchase without the risk of gazumping.
The key difference of buying at auctions is that when you make your offer, it is a live bid in the auction, and if yours is the winning bid contracts are exchanged upon the fall of the auctioneer’s gavel. You are legally bound to buy from that point onwards.
You will pay your deposit (normally 10%) immediately Plus any buyers premium (if any) and complete within the timescale defined in the legal documentation for the lot. This will normally be 28 days, but can be sooner or later. So please be sure to check the legal pack before bidding.
At completion you will pay the balance of the purchase costs. Normally via the vendors (sellers) solicitors so you need to complete all of your checks.
If you do require mortgage or other finance to buy, be sure all your funding is in place.
Whilst you are bound to complete upon your winning bid, you have the comfort that the seller is similarly bound, so there is much greater certainty when compared to an offer made through a traditional estate agent (private treaty) sale. .
Preparing to Buy
It doesn’t matter what your reason for buying at auction is, the key to success is preparation.
Before you go along to an auction to buy a property there’s a lot of groundwork that needs to be done first. A good place to start is by making a list. ’.
It could be a particular location,detached or semi-detached, number of bedrooms, price range, space for parking, etc.
Once you have an idea of what type of property you want to buy, then you’re ready to start your search.
Always get a copy of the auction catalogue and talk to the auction team with any general questions you might have.
Before the Auction
Preparing to Buy
(live and some online auction advice)
Buyers will need two forms of identification, You will also need a copy of the auction catalogue, your solicitor’s details and a deposit – if you are successful then you will need to pay this along with our contract documentation charge when contracts are exchanged, which happens on the fall of the hammer. It’s also a good idea to arrange for your buildings insurance policy to commence as soon as the hammer falls.
What happens when things go wrong
Things should not go wrong if you complete your checks before bidding and follow some basic rules.
NALC Property auctions make every effort to ensure things go right for you.
However to avoid obvious pitfalls, both buyers and sellers at auction should understand the key differences of transacting by auction when compared to making an offer with an estate agent.
If you are buying at auction it is essential to understand that upon the fall of the auctioneer’s hammer a legally binding exchange of contracts has taken place. You are required to pay the purchase deposit together with our Contract Documentation Charge and any buyers premium there and then. Indeed if you are bidding by telephone or proxy we will need these funds in advance of the auction.
You will also need to be 100% sure that you will have access to all the funds required to complete the purchase on the agreed completion date as set out in the contract conditions.
This differs from buying through an estate agent where an offer made and accepted is then referred to solicitors who may take many weeks to effect exchange of contract and before such point either party can withdraw with impunity.
With all the above in mind in order to consider buying at auction, bidders should complete all their enquiries and checks (due diligence) prior to bidding. As a minimum this should include inspecting all the documents in the legal pack and taking advice upon the contents where appropriate or unsure of understanding, inspecting the property, completing any survey which may be required and ensuring funds are in place for all costs required to complete the purchase.
Sellers too, need to understand that entering a property to auction is a commitment which may involve costs that may not be recoverable if there was to be a change of heart. Abortive transactions may cause legal costs and withdrawal charges, so again if you are selling make sure you are prepared to see things through before deciding.
Whether buying or selling if you are unsure about anything ask us before committing.
We have a prescribed complaints procedure and subscribe to a Code of Practice agreed with Trading Standards and The Property Ombudsman, who provide the ultimate arbiter for the resolution of any complaints.
- Where a guide price or range of prices is given that guide price is the minimum price at which or range of prices within which the seller might be prepared to sell at on the date on which the guide price is published upon this website. The guide price will normally be at or above the reserve price. The guide price may be subject to change at any time up to and including the day of the auction the latest publish guide price or range of prices is displayed on our website and you are advised to check the website regularly for any updates alternatively you can of course call the office and speak to a member of our team on 01636 558200 for an update on the status of any particular property which you may be interested in.
- All guide prices are always quoted subject to the auction contract.
- Please note the guide price in the lot does not include any buyers fee charged by the auctioneers and the VAT on the sale price, any stamp duty land tax or any other taxes or additional fees which may be payable
- Additional costs and fees charged by the seller or third parties that might apply to some lots and also some buyers’ fees are not included within the guide price.
- if a guide price is listed to be advised that’s TBA it means no guide price has yet been set, should you be interested in this particular property please do not hesitate to call the office on 01636 558200 and the members of staff in the office will endeavor to give you the most up-to-date information.
- For each lot a buyer’s fee is payable on the fall of the Hammer.
- NALC Auctions Ltd charge the following amounts for a residential auction. All lots £650 plus the VAT
- For our chattels and machinery and equipment auctions a minimum of 10% buyer’s premium on the hammer price will be charged.
- Sellers fees and additional charges might be charged by the seller and all other parties. You are strongly advised to read the special conditions of sale for the lot prior to bidding and check any additional charges and fees and to check the addendum. The addendum may but does not always contain details of any such amounts.
- Some lots (commercial property) VAT may be chargeable in addition to the sale price of the lot. The lot particulars and all the special conditions will explain whether VAT is chargeable or not.
- Other matters. Please note that lots may be sold or withdrawn at any time prior to the auction.
- Please note that the amount of security (deposit payable) per lot is variable and must be agreed with the auction department prior to bidding please refer to the addendum and the particulars and conditions of sale which will normally state the guide price and required deposit or bigger security deposit. The required deposit will normally be 10% plus any buyer’s premium
- Plans are reproduced with the consent of promap and ordnance Survey and are licensed by HM stationery office
- Plans and photographs shown in the catalogue and on this website are included in order to assist you in locating the lot in question. They are not necessarily drawn to scale and any arrows on plans or photographs are merely there to assist you in finding the lot itself and not for the purposes of indicating the legal boundary; especially when referring to Land Registry plans.