Buying a Property at Auction
It pays to have the auction pack checked before the auction. Avoid buyer's remorse!
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 generally be required to reimburse the seller's search costs and often their legal fees. As well as paying your own legal fees.
Some auction packs do not contain searches and you are expected to rely on indemnity insurance. That means you will NOT have full information and there could have been adverse issues revealed in the searches.
Before Bidding at Auction:
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. They should be less than 6 months old. The Seller is supposed to include these in the auction pack. A Coal search is necessary in certain locations.
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.
Only bid if you are 100% committed and sure you can complete and have the funds to hand.
Read the auctioneer terms and conditions and all literature. The small print is important.
If you are a cash buyer your Conveyancer must satisfy Source of Funds compliance. They are heavily regulated. 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 AND 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
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 some instances there may be a reason why a property is sold at auction. This could 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. You are taking a risk if you do not.
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
Request a Quote:
https://www.emmaselfridgelawyer.com/contact
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