Auction Property Solicitors

Property auctions can be a fast and cost-effective way to buy or sell a property. Speed is the name of the game at auction sales, and winning bids made on the day are binding. This means you must do your homework ahead of time and know what you potentially are committing to. Our conveyancing solicitors can guide you through the auction process so you don’t make any costly mistakes.

How do property auctions work?

At an auction, interested buyers bid for a property and the highest bid wins. The sale is under contract as soon as the hammer strikes and the winning bidder must immediately put down a 10% deposit. Completion usually takes place within 28 days when the rest of the purchase price is paid.

When selling at auction, the seller will often set a minimum price they will accept for the property. This is known as the reserve price. The seller only has to sell the property if the bidding reaches the reserve price. However, the reserve price is a confidential number known only to the seller.

Bidders see another number, which is known as the guide price. The guide price may be much lower than the reserve price to attract more potential bidders to the auction. It does not necessarily reflect what the property is likely to sell for.

Some properties generate a lot of interest from potential buyers. Bidding may be fast and furious which can soon drive up the price.

How do you buy a property at auction?

The starting point is to review the auction brochure and decide which property or properties you are interested in bidding on. Your solicitor will then review the auction pack prepared by the seller’s solicitor. This contains all the legal papers that are needed including the title deeds, property searches, replies to pre-contract enquiries and special contract conditions.

It is important that you have these documents checked by your solicitor as there’s no backing out if you make the winning bid. Your solicitor will advise you of any risks associated with the purchase, including any matters that might affect the property’s value or your ability to sell it in the future.

Once the auction has finished, all contracts are binding, so you need to have your 10% deposit ready. You can then instruct your solicitors to transfer the rest of the purchase price and complete the transaction within 28 days.

How do you sell a property at auction?

When selling a property at auction, the first step is to have it appraised. The auction you’ve chosen often will take care of this. They will give you an idea of how much you can expect to sell the property for and advise on your reserve price.

If you decide to go ahead, you should appoint a solicitor to draw up the auction pack. This will include title deeds, search results, answers to pre-contract enquiries, planning permissions, conditions of sale and other important documents. Interested buyers can request a copy of the pack before the day of the auction.

When the day comes, potential bidders will register for the auction and bid on your property. Contracts are exchanged on the day and the winning bidder will pay a deposit. Your solicitor will then work to complete the sale within one month.

What if the property doesn’t sell at auction?

If the property does not sell on the day, the seller usually has the option of holding a “post-auction sale”. Here, the auctioneer will invite interested parties to submit their best offer, which may be less than the reserve price. The seller will then decide if they wish to accept an offer. Any sale agreed this way will still be under auction conditions.

Why choose Osbornes as your action property solicitors?

At Osbornes, we understand the complexities of buying and selling a property at auction. Our solicitors will provide comprehensive advice on all aspects of an auction purchase or sale, from preparing and reviewing legal packs to dealing with completion and registration. We also provide advice on post-auction sales. Contact us today to learn how we can help.