Buying a property at auction is different from buying a property by private treaty (the normal way of buying a house through an estate agent)

Here are the main ways in which buying at auction is different

1.The property is publicised for a short period of time.

When a property is offered for sale by auction it is normally only marketed for a period of 3-5 weeks before the auction date. This means that if you want to buy a property you must act swiftly.

2. Contracts are exchanged at auction

If you are the successful bidder at auction exchange of contracts occurs on the fall of the hammer and you are required to pay a 10% deposit immediately. Exchange of contracts means you are legally bound to buy the property and could lose your 10% deposit if you fail to complete. In most cases completion is between 14 and 28 days following the date of the sale but is specified for each property. Completion is on the point at which you pay the balance of the money (the outstanding 90%) and become the owner of the property.

3. Once contracts are exchanged there’s no going back

If you agree to buy the property from an Estate Agent you have several weeks wholly, during which you are able to change your mind. If you buy a property at auction there’s no going back as you will have exchanged contracts immedietly on the day of the auction and will there for be legally committed.

Buying at auction can be simpler and quicker from buying from an estate agent. We would however recommend the following steps to minimise the risk of something going wrong.

• Do your research – Investigate the local area as much as you can. Familiarise yourself with the value of house in the vicinity of the property you want to buy. Tale professional advice and this way you are ensuring a good deal at auction.
• If you require a mortgage or finance of any kind, call Mortgage Arena and have this in place before you bid. If you cannot complete because you have not organised to have the sufficient funds in place, you may be given longer time but ultimately you could lose your 10% deposit. Mortgage Arena has experience in arranging finance to purchase at auction and there for will guide you.
• Get a solicitor to check the legal documents for you. There may be a small charge to do this. If there are then any queries a solicitor has picked up on, it is better to find out before the auction. Most legal documents are available to view online on the auctioneer’s website or on the day. They are normally available approx 7 days before the auction.
• Check the auctioneer’s late announcement sheet on the day or check on the website. If there are any amendments to the legal pack or property description at the last minute it will be on the late announcement sheet. If you check this at the earliest opportunity it will give you chance to speak to your solicitor or surveyor if you require professional advice. If the property has been withdrawn from the auction it would normally be stated on the late announcement sheet.
• Check the auctioneer’s website right up until the night before the sale, particularly if you are travelling a long way to the auction. If the property is withdrawn from the sale this will be shown on the auctioneers website. In rare cases a property can be withdrawn on the day of the sale.
• If you bid by telephone or a proxy the situation is exactly the same. You will be required to pay a 10% deposit and complete 21 days later (or whatever time frame is stipulated in the terms of the contract)
• If you are attending the auction, get there early and make sure you have the correct documentation with you. (Auctioneers vary with what documents require in order to purchase at auction) Normally they require two forms of identification together with proof of address, and how you intend to pay the deposit. (Cash excluded)

It is possible to pick up a really good bargain at auction. Do your research, take advice, follow the guidelines above and take full advantage of the opportunities on offer.

If you require professional advice on legal documents, Mortgage Arena can put you in contact with a solicitor that is used to dealing with auction purchases.