How do auctions work when buying a home?

Auctions are a great way to purchase a property; however, the process differs from the traditional route of conveyancing.

The property market is currently booming and auctions are a great way to place a fair bid at the same time as other potential purchasers, instead of having the short time that houses are currently on the market to do the same.

Auction houses will generally release catalogues of the properties that they have on offers a few weeks prior to the auction itself. If you find a property that you are interested in, unlike the traditional route, you have to wait until the auction date before placing your offer.

Properties at auction will have a guide price of what the seller believes the property to be worth and a reserve price highlighting the minimum that the seller will accept. It is usually recommended to offer higher than the reserve price, especially in the state of the current housing market, where properties are intensely sought after. However, we are not qualified to advise you on the value of any properties.

As your solicitors, you can instruct us prior to the auction date and we will review the property information and report to you on the same. As the auction house would have published a legal pack containing the conditions of the sale, this could be extremely useful for you to know what you are bidding for. This is also a great way to determine whether there are any underlying legal issues with a property before being bound to buy it.

We would recommend instructing a solicitor to look over the legal pack as there are often problems within title documents and issues that should be addressed by a legal professional before being bound to purchase a property. If your solicitor can identify these issues, you will be best prepared to understand whether it is worthwhile placing a bid and further, how high of a bid is worth placing. As the searches are also usually done by the seller, it is not just the title issues that can be reviewed by the solicitor but the issues regarding the surrounding land and the property itself. We can determine whether the property benefits from any building regulations certificates, if there is any flood risk to the property and many other environmental issues. Hence why this is an extremely important factor of the auction process.

At an auction the person with the winning bid will need to exchange contracts immediately and pay a deposit. Completion will then be set for a date in the future, usually within a short space of time. If you are using a mortgage to purchase the property you should obtain an agreement in principle prior to the auction to prevent any delays between exchange and completion.

If your bid is accepted, if you have not already, you can then instruct us as your lawyers. We understand the time restraints on auction properties and will work to complete the matter in the expected time. We will then go on to do the same legal work as is required in a typical conveyancing purchase.

All being well, we should be able to complete the purchase in the requested time ready for you to move into your new property.

Auctions are fun and exciting so please use this guide to help you along your journey and get in touch with us with any further questions you may have.

Call Battrick Clark on 0117 973 1391 and ask to arrange a time to speak to one of our friendly team of dedicated property law solicitors.