There are several differences between buying from property auctions and from estate agents. At a property auction:
Choosing your property
- A contract is binding once the auction hammer has been banged
- The property is put on sale on a specific day
- There is no risk from gazumping
- A wide range of properties are available countrywide through auction, including seized repossessions and properties needing renovation.
- Legal enquiries and searches must be done before bidding.
- All bids made are unconditional so finances must be in place beforehand.
- Look through the catalogue and mark those properties of interest to you.
- Check the guide price, this is not the asking price but a guide price only.
- Call the agent and ask to arrange to view the residential or commercial properties that interest you.
- Register your interest with the agent. The agent can then contact you if the property is withdrawn.
- Enquire about any legal issues. Pass a copy of the auction catalogue to a solicitor, as you will be expected to sign and exchange contracts in the auction room.
- Get your finances sorted. If you need a mortgage get it approved in principle before the auction day. The price you bid for is the price you must pay. A deposit of 10% of the purchase price is required on the day. The minimum deposit is usually £1,000. The 90% remaining is payable within 28 days.
- Ensure the deposit is ready and that your lenders know you are purchasing your home by auction.
- If you are unable to attend the auction you can make a proxy bid, by telephone, in writing or online over the Internet. The agency must have your registration form and cheque for the deposit before bidding commences.
- It is advisable to call the agency the day before the auction as sometimes houses are sold or withdrawn prior to the auction.
- On the day you will need the catalogue, your cheque book, a form of ID, the contact details of your solicitor.
- During the auction the auctioneer invites bids at a certain increase level. To bid raise your hand or catalogue.
- If you are successful in purchasing at the fall of the hammer you will be expected to fill out a simple form and produce a form of ID. You will be given a 'lot card' which your proof of purchase. The contract will be prepared and signed.
- As soon as the contracts have been exchanged the property is the new owners insurable risk, so it is essential to arrange building insurance immediately after the sale.