Buying at auction

There is an auction soon and I am interested in purchasing one of the properties for sale. What should I do?

Firstly, obtain any information held by the auctioneer's office and the seller's solicitors. Next, you will need to speak to your solicitor so that your solicitor can check through the title deeds and search results with you. Unless you have the funds available, you will also need to speak to your financial advisor, because you will need to have a written mortgage offer prior to the auction. You should also carefully inspect the property yourself.

Can't I just turn up at the auction with my cheque book?

It is advisable to have the advice of a solicitor before the auction, and you may also wish to obtain a report on the property by a surveyor. You must also have the finance in place.

What will happen on the day of the auction?

If you are the successful bidder, you will have to show the auctioneer some identification and pay a 10pc deposit. You will then need to pass the paperwork to your solicitor so he or she can prepare for completion of the purchase. You may also need to set up buildings insurance.

What is meant by the “guide price” and “the reserve”?

The guide price is the approximate value of the property, as established by the auctioneers. The property could sell for a much higher figure, though, if there is a lot of interest at the auction. The reserve is the minimum price which the seller will accept and if the property fails to reach the reserve then it will be withdrawn. However, you might be able to make the auctioneer an offer after the auction.

What are the advantages of buying at auction?

You may be lucky and manage to secure a property at a good price. However, if you are not successful, you will have the wasted costs of your solicitor and mortgage arrangement fees. It is a good

idea to attend an auction or two, and carry out lots of research, before you consider bidding for a property.