Unless you are a property expert it is worth having the auction pack checked before the auction to avoid buyer's remorse!
Standard Auctions - You MUST complete within 28 days regardless of whether you have finance in place.
This will be 56 days if it is a Modern Auction.
If you are successful at auction you are contractually obliged to complete. You will usually be required to reimburse the seller's search costs, any other third party disbursements, plus the seller’s legal fees. You must also cover your own legal fees to complete and register the property.
Some auction packs may not contain searches and you are required to rely on indemnity insurance. That means you will not have full information. There could have been issues revealed in the search results. It is up to the seller what they include in the auction pack. You can order searches before completion but it may be tricky to raise enquiries as exchange has occurred.
Before Bidding at Auction It Is Advisable To:
Get your Conveyancer to cast an eye over the auction pack (title deeds, enquiry forms and searches).
Carry out a physical inspection. Remember that your Conveyancer will not be going to the property and cannot raise enquiries if you win.
Ensure the auction pack contains up to date searches. Local, Environmental and Drainage. Others may also be relevant depending on location. A Coal search is necessary in certain locations for example. Searches should be less than 6 months old. The Seller will hopefully include these in the auction pack
Review the Seller’s Property Information Form, Fixtures & Fittings Form and Seller’s Leasehold Information Form (if applicable). Are they dated within 3 months to ensure they are up to date. Are they signed by the seller. Most auction property is sold as seen. Remember that Buyer Beware applies.
If leasehold - do you have Ground Rent and Service Charge information and the relevant leasehold packs (LPE1) and enclosures? Review these to ensure effective management of the building. Is it being maintained and insured? Are there arrears?
Buyer beware applies. This means the property is “as is” or subject to all defects. It is vital that you have sight of current searches, carry out inspections and you should have a survey to ensure that you are aware of any defects. If you win you will take the property subject to defects. You cannot sue the seller as the risk was yours.
Funding - Don’t bid without a mortgage offer (or the cash) in place. If you win you are contractually committed. Breach of contract will cost you in penalty interest payments and can lead to compensation. Have your ducks in a row.
Read the auctioneer terms and conditions and all literature. The small print is important.
If you are a cash buyer your Conveyancer must still satisfy Source of Funds compliance. They are heavily regulated regarding the same. Have a paper trail ready. This cannot be waived because it is inconvenient.
Success at Auction
You CANNOT make the seller, or their Conveyancer, answer any enquiries post auction. You MUST complete within (usually) 28 days or face breach of contract. Breach means you will be paying penalty interest, losses and compensation.
If you would like to instruct me in your auction purchase (pre or post auction) please get in touch.
07944 377029 | 02922 648003
NB: BEAR IN MIND
A perfect Freehold auction pack includes:
• Office copies of the register and plan
• Copies of any historic Transfer or Conveyance
• Seller's Property Information Form
• Fixtures and Fittings Form
• Copies any planning, building regulations
• Copies guarantees, warranties, certificates etc
• The Energy Performance Certificate (EPC)
• Recent Local, Drainage, Environmental Searches
• Coal Search in certain areas
A perfect Leasehold pack also includes:
• Seller's Leasehold Information Form
• The Lease referred to in the office copies
• The Leasehold Management Information
• Ground Rent & Service Charge Information
• Current Buildings Insurance Policy
In rare instances there may be a title (legal) defect or a structural issue. As buyer beware applies your Conveyancer would prefer to check title before the auction and for you to hold a clear survey and mortgage offer. This is for your protection.
Buyer beware means you take the property as is and subject to all defects. The seller is NOT required to point these out. So your checks need to be thorough.
A N D
Late or Non completion is breach of contract. Any problems obtaining finance for completion are not relevant. That will not get you out of the contract. If you win the auction you are contractually obliged to complete. You will owe the seller compensation and penalty interest if you do not complete.
MY SERVICES INCLUDE:
Acting for anyone Buying, Selling or Remortgaging In England or Wales
I am a:
• Solicitor of 23+ years
• SRA & CQS Regulated
• Help to Buy Accredited
• Recommended - Trustpilot & Yell.com
Instruct me for your:
• Transfer of names on deeds & mortgage
• Equity Release & Lifetime Mortgages
• Bridging Finance
• Auction Property
• Leasehold matter
• Freehold matter
• Trust Deeds & Declaration of Trusts
• ID1 Forms (HMLR)
• Statutory Declarations
• Independent Legal Advice
• Shared Ownership or Shared Equity
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