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Buying a Property at Auction



Be wary. There may be a reason a property is sold at auction. This could be a title (legal) defect or an issue with structural soundness.


If you are successful at auction you will be reimbursing the seller's search costs and possibly their legal fees as well as paying your own legal fees.


You MUST complete within 28 days regardless of whether you have your finance in place


AND


Late completion is breach of contract and you will owe compensation and penalty interest



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.




Success


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


emma@emmaselfridgelawyer.com


www.emmaselfridgelawyer.com


07944 377029






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