Auction Buyers Guide
People buy at Auction for lots of reasons. You may want to move quickly or be looking for a plot of land to build on, a repossessed property, something perhaps to improve, or quite simply you may want a quick purchase. You may want something really unusual or just want to find a home. Also, many buy-to-let investors buy at Auction as the bigger the sale, the greater the number of opportunities. It doesn’t matter what your reason for buying at auction is, the key is preparation. It is not complicated but can appear daunting, that is where Millerson can help.
First you must decide what sort of property you really want. It is a good idea to make a list of “must haves” and “nice to haves”. Must you have 3 bedrooms, would you like a conservatory? Must you have off-street parking, would youlike a large garden?
Registering with Millerson will ensure that you are amongst the first to hear about new opportunities coming to the market. The quickest way to get a copy of our Auction properties is to subscribe to our mailing list, this way they willbe sent to you as soon as they’re produced.
Once you’ve found the property you’d like to buy, here’s a list of the things you need to do beforehand:
- View it more than once.
- Arrange your finance. If you are financing the purchase through a mortgage you should have a formal offer before the Auction.
- Make sure you have a survey. You will probably need this if you are financing the purchase with a mortgage. If you are paying “cash” you’ll want to make sure the property is structurally sound and isn’t going to drain your resources.
- You’ll need a deposit, normally 10% of the purchase price, which is payable by personal cheque or bankers draft at the Auction once you’ve bought the property. In addition to the deposit you will also be requested to pay the sellers costs typically £250 - £350 but as per the Auctioneers announcement prior to the start of bidding although some sellers will accept this on completion.
- Obtain a legal pack – sometimes there may be a charge for these – check with us.
- Consult a solicitor about the purchase to avoid any legal pitfalls. Have a look at a copy of the legal documents and make sure you have a copy of the Auction catalogue as this forms part of the legal contract between you and the seller.
- Some of these processes will cost money, but it’s worth it for your peace of mind.
- Having done your homework and you feel you can’t wait, you can submit an offer before the Auction which will be forwarded to the seller. If this is accepted, your purchase will go ahead and when contracts havebeen exchanged, the property will be withdrawn from the Auction. You will have to move quickly though!
At The Auction:
- By far the most exciting part of buying or selling at Auction is the sale itself. Be prepared. Do check that the property that you are after is still available.
- At the Sale you’ll need two forms of identification, your auction catalogue, your solicitor’s details and your deposit. If you are successful you will need to pay when contracts are exchanged which happens on the fall of the hammer. Under no circumstances can we accept cash, credit cards or debit cards.
- Sometimes there will be a solicitor on hand to answer any last minute questions you may have about the property you plan to bid on but don’t assume there will be, its best to ask any questions prior to the Auction day.
- Don’t forget buildings insurance, it’s your responsibility from the fall of the hammer.
- Before the sale begins the Auctioneer will read out any last minute alterations to the sales details.
- When the property you are interested in comes up, make sure you know the maximum price you can afford to pay - it’s easy to get carried away!
- Once bidding begins, potential buyers will be asked to make their bids clearly either by raising their hand or their bidding number. Don’t worry; you can’t buy a property by scratching your head!
- Once the final bid has been put forward the Auctioneer will make it perfectly clear that the property is to be sold.
- If a Lot fails to reach the reserve price, it will be withdrawn from the Auction and the Auctioneer will invite anyone still interested to talk afterwards. Sales can still be made if a price is agreed with the seller.
- If you can’t attend then you can arrange for someone to submit bids on your behalf. They’ll need your written consent and you should agree limits before bids are submitted. If you want someone to bid on your behalf then Millerson must be notified at least two days before the Auction.
- Not all venues are able to support telephone bidding. Attending the sale is by far the best way to bid.
- Once the hammer falls, contracts are legally exchanged. Before leaving you should sign the contract and pay the deposit immediately. The Auctioneer is legally entitled to sign the contract on behalf of both the buyer and seller if necessary. The deal is done and you now have a new home, congratulations!
- The completion of the sale takes place anything between 14 and 28 days later; by agreement.
- The balance of the sale monies will be paid on completion. A solicitor will normally deal with this part of the sale.
- A point to note - please remember the Guide Price is an indication of what the property might realistically be expected to sell for on the day of the Auction. It is quite different to the Reserve Price which is confidential between the seller and the auctioneer and is the minimum price that the seller would accept on the day of the sale. Reserve Prices are not usually agreed until just before the Auction and so may affect the sale price of the property on the day.