Auction Properties

An auction is where a property is purchased or sold at an auction house. Bids are placed and once the highest bid is accepted the hammer (the gavel) goes down and contracts are legally exchanged and binding.

Selling a Property at auction

If successful, selling at an auction can offer a speedy completion which is usually 21 days after the auction. There is no break down of a chain, no change of minds and no re-negotiation of the price. Properties sold at auction may include those requiring renovation, unusual properties which are difficult to value, conversions, commercial or tenanted properties and probate sales.

Selling a property at auction can prove more expensive. Should the property not be successfully sold you will still pay the auctioneer's costs and, if it is successfully sold, you will pay the auctioneer a commission.

Before the auction the auctioneer will list the property in the auction catalogue and usually erect a sale board, draw up the general conditions of sale, make the seller?s solicitor's legal pack available and answer potential buyers' enquiries.

Before the auction you will need to instruct a solicitor or a conveyancer to prepare the legal pack (including a Home Information Pack (HIP), evidence of title, any leases and replies to standard pre-contract enquiries) and to draft the Special Conditions of Sale. We would be pleased to do this for you.

If there are tenants in the property is important that the Special Conditions of Sale clearly state that the property is to be sold subject to the tenancy and that vacant possession will not be given to the buyer on completion. If, on the other hand, the property is not being sold subject to the tenancy you must ensure that all current tenants have been served with the requisite notices and that they will have vacated the property on or before the date of completion.

If you have elected to waive VAT exemption in respect of the property, you should ensure a Special Condition is included in the auction contract that will bind the purchaser to pay VAT in addition to the purchase price.

Buying a Property at auction

When buying at auction you must be careful as if your bid is accepted and the hammer goes go down there is no way of going back - contracts will have been exchanged at this point and you will be legally bound to pay a 10% deposit with the balance to be paid on the completion date - usually 21 or 28 days after the auction.

Therefore in order that you can make a fully informed decision and are able to commit to your bid it is always advisable that you consider the following before the auction:

Organise your finances:
When considering to purchase an auction property you must first consider if you have the necessary finances to pay the deposit, the balance to complete and the legal fees, any Stamp Duty etc.

If you need a mortgage to finance your purchase it is important you have ensured that the mortgage lender has provided you with a formal written offer before the auction. Make sure that you have organised this as early as possible as the mortgage lender will wish to have the property valued before issuing a formal offer.

Make a full inspection of the property:
Before the auction you should have made a full inspection of the property and it is recommended that you should have a professional survey carried out. Remember that the property is sold as seen and that no warranties will be given to you by the seller.

Take legal advice and check the legal documents:
Before legally binding yourself at auction you should have instructed a solicitor or conveyancer to review the title and the contract (the seller?s Legal Pack) and to carry out any necessary searches. We would be pleased to do so this for you and offer a pre-auction review of the legal papers.

It is important that before placing your bid you have read and understand all of the legal documents, the search results and the auction contract with the Special Conditions of Sale in order that you are aware of what you may potentially be binding yourself to. We are able to advise you of the legal issues that will effect you and to ensure that when the hammer falls you will not be in for any nasty surprises.

Be aware that changes can be made prior to the auction, such as additional Special Conditions of Sale to the contract. Any such changes must be made available prior to the auction.

Please also be aware that you cannot alter the terms of the contract after the hammer has fallen and that the consequences of failing to complete are severe.

If you are interested in a property which is to be auctioned you should register your interest with the auctioneer in order that he may notify you if the lot has been sold or if it is withdrawn prior to the auction.

When choosing the property that you wish to purchase you should check if it is being sold with full vacant possession or subject to any tenancies and also if you will be liable to pay VAT on the purchase price.

If you are unable to attend on the day of the auction you can bid by proxy in which you place your bid in writing to the auctioneer or otherwise bid by telephone.

If you are considering selling or buying a property at auction please feel free to contact us to discuss your requirements.

For more details - on a no obligation basis - please call or email

Richard Temple - partner - 01603 617018
rtemple@coleandcosolicitors.com