Property Auction Planner
Buying a property at auction is a rapid process- they're often advertised only 3 to 6 weeks in advance and payment must be made in full within 4 weeks (20 working days) of a successful bid.
It's important to remember that when bidding at auction, you bid unconditionally, and you cannot back out and you will lose your deposit if you cannot complete the purchase for any reason.
If you're thinking about buying at auction, then you'll need to carry out the following:
Before the Auction
- Contact property auctioneers in the relevant area and order catalogues for forthcoming auctions.
- Check when you need to register, should you want to bid.
- Arrange to visit any property you are interested in.
- Make a shortlist and go to the local authority with questions about your chosen properties. Find out if they have rights of way, boundary problems, and so on.
- Arrange to re-visit properties you are still interested in.
- Organise a survey and ask the surveyor or a builder to advise what, if any, work would need to be done and how much, roughly, it would cost.
- Visit a mortgage provider to set up the mortgage offer on any property you will be prepared to buy. This must be done before you go to auction. You can only bid if you have the money available, or it could be accessed within 20 working days of your bid being accepted.
- The day before the auction, phone the auctioneers to make sure that the properties have not been withdrawn.
The guide price is usually set low to tempt potential buyers - properties will usually sell at a much higher price - sometimes over double!
The Day of the Auction
- Attend the auction, making sure that once you have decided the maximum amount of money you can bid, you stick to it.
- If your bid is successful, your contract to buy the property is binding as soon as the hammer goes down.
- You will usually be asked to sign a contract, though there is no actual legal need - you are bound anyway. You'll be asked to pay a 10% deposit or £1500, whichever is the greater, by banker's draft or cash.
- You must also prove your identity (so take some form of ID with you) and your solicitor's details.
After the Auction
- Insure the property immediately
- Pass details of your property to your mortgage lender to fast-track processing
- Instruct your solicitor or conveyancer
- Completion should take place within four weeks (20 working days)
If you're one of the last bidders for a property that fails to reach the reserve price, the vendor may accept an offer after the auction. Tell the auctioneer if you're willing to improve your bid.
