Buying a house cheaply at Auction can be very exciting, but it helps to get a Fridaysmove Auction Conveyancing Solicitor to check that you don't get stuck with a bad bargain.
Auction sales have become an increasingly popular way of selling homes, and prospective buyers see Auctions as easy way to buy a property at a low price. But if you haven't bought at auction before, be warned that the process is not the same as buying privately. Many people have found their dream turning sour because they did not take the trouble to appoint a Conveyancing Solicitor before bidding for a property at auction.
The cardinal rule on property sales is "buyer beware" and on an auction purchase you cannot back out once the auctioneer's hammer has fallen, so taking professional advice beforehand is strongly recommended. The BBC's website has an informative page with lots of useful tips on buying at auction, and recommends seeking advice from a Conveyancing Solicitor beforehand.
It is understandable that you do not want to incur legal fees before the auction, as you might not be the successful bidder. However, be aware that if your bid is accepted then a contract is created, so if you are the highest bidder you will have to complete the purchase even if you then find something wrong with the property. A Fridaysmove Conveyancing Solicitor will give you a quote for carrying out any preliminary work, so you will know how much you are going to have to pay for advice even if your aren't successful.
A Conveyancing Solicitor will give you impartial advice - don't forget that the auctioneers are act for sellers, so their interest is to sell the property.
Successful Auction - Recommendations
What will a Conveyancing Solicitor do for you before the sale?
- A Conveyancing Solicitor experienced in Auctions will be able to guide you through the whole process.
- They will ask to see the Auction sales brochure and will obtain copies of any documents relating to the property referred to in this.
- In particular they will check that the seller's legal title matches the property description in the brochure, and whether there is any discrepancy between the seller named in the brochure and the name of the registered proprietor
- They will also see if the sellers have carried out any local searches and supplied other information about the property. Many auctioneers now have facilities for Conveyancing Solicitors to download these documents, which saves time. Sellers are not obliged to carry out these searches or supply any information, and in that case your Solicitor can advise what steps should be taken.
- For leasehold flats and similar homes your Property Conveyancing Solicitor will check the provisions of the lease and check any information about the management of the building, such as the level of service charges.
- They will also check and advise you on the Conditions of Sale which will form part of the sale contract.
- They can ask the seller's solicitors for more information on legal matters affecting the property
- The Solicitor will also be able to carry out ID checks on you which are now required to comply with the Government regulations.
If you are successful, let your Conveyancing Solicitor have all the details as soon as possible. They will want to see the Auction contract which the auctioneers will usually sign on the vendor's behalf and give to you when you pay the deposit. They will also want to establish contact with the seller's solicitors, so that there is no delay in proceeding.
Even if for one reason or another you haven't appointed a solicitor beforehand, it helps to instruct your Conveyancing Solicitor as soon as possible after the sale. Don't assume that because you have dealt with a solicitor's firm previously they will automatically take action once they receive the sale details from an auctioneers.
On an auction purchase, the Conditions of Sale will stipulate a fixed completion date. That is the date on which you will be required to pay the balance of the purchase money (a 10% deposit will normally have been paid at the auction) and the legal ownership is then transferred to you. The completion date is usually four weeks after the date of the auction sale, but may be sooner. Your Conveyancing Solicitor will still need to carry out various procedures before completion, especially of you are buying with a mortgage, but if you are successful and have already instructed your Solicitor they will have all the property information available so should be able to complete other legal formalities in good time.
One crucial point to remember is that once the auction has been completed, you cannot back out without penalty. You will usually have paid a 10% deposit to the auctioneers so if you cannot get sufficient finance or change your mind, you will lose that deposit. The seller can also sue you for any other losses and expenses in connection with the sale, as you will be in breach of the contract formed at the auction.
It's remarkable, the number of people who buy a property at auction without even viewing it. They have often only seen the details in the auction catalogue or the auctioneer's website. It has even been known for someone to attend an auction looking to buy one property, finding that it sells for more than they could afford, and then buying a different property at the same sale without knowing a thing about it! Once you have bought the property, you cannot pull out because the cellar is flooded (yes, it has happened!) or because the roof is in danger of collapsing, so it is very strongly recommended that prospective buyers have a proper survey carried out beforehand, rather than rely on a mere visual inspection or none at all.
Please remember that you will have to find the balance of the money to be able to complete, so if you need a mortgage you should have some preliminary assurance that you can get the funds you require. Lenders will not normally commit themselves until they have received a survey report, which is not carried out until after the auction. If the surveyor finds a problem with the property or down values it then you may have difficulties.
Many houses sold at auction are in less than perfect condition, and buyers often look to pick up a bargain building with the idea of restoring it, but in such cases it is unlikely ordinary mortgage lenders will help. Unless you have sufficient cash you will probably have to approach a specialist lender; this should be done before the auction.
For expert advice and a quotation please contact one of Fridaysmove specialist Property Auction Conveyancing Solicitors who will be able to give you the necessary assistance, phone 0330 660 0286.