Although there are profits to be made on auction properties, there is a high level of risk for buyers which makes it very important to obtain legal advice before you make a bid. Our auction solicitors can offer a fixed fee service for buyers to check an auction pack before the auction.
If you are a buyer, it is important to remember that if your offer is accepted at the auction you will have exchanged contracts and you will be legally required to complete the sale, usually within 28 days of the auction. If there are issues with the property, or the sellers title, it will be too late to withdraw from the purchase without incurring penalties. At the very least, you will usually forfeit your 10% deposit.
Selling property at Auction
Auction solicitors will prepare the auction pack for you to send to the auctioneers. The pack will usually include the following:
- Special Conditions (the contract) and your replies to some standard forms.
- On a leasehold property, replies to enquiries from a freeholder including service charge information.
Although there are costs involved in obtaining searches and replies from a freeholder, it is standard for the special conditions to provide that a buyer will reimburse your costs on completion.
It is important to contact us as soon as possible if you intend to sell at auction so that there is sufficient time to obtain the searches and any replies.
Buying property at Auction
There is often a good reason for a seller to choose to sell a property at auction. This can be because the seller wants a quick sale, but it can also be because of issues with the title which make it difficult to sell the property in the usual way. This is why it is important that you arrange for us to review the auction pack before attending the auction. You also need to be confident that, if necessary, you can finance the purchase, either through your own funds, a mortgage, or bridging finance.
It is standard for the auction special conditions to state that a buyer will be liable for the seller’s legal fees, which are often a percentage of the purchase price. It is important to bear this in mind when deciding how much you can afford to bid.
We offer a fixed fee service for buyers to check an auction pack before an auction. If you are successful at the auction our auction solicitors can then deal with the completion and post completion matters. The overall legal fee for the purchase is reduced by the amount that you have paid us to review the auction pack.