Preparing for auction The main attraction of buying at auction is that you avoid the conventional drawn out process of house buying. At auction it's condensed into a matter of minutes rather than months and when the hammer falls, you are contractually committed to purchase the property with a fixed completion date. If you are new to auctions, it is a good idea to sit in on one first before you join in. Go through the catalogue carefully, read the details thoroughly and identify the properties you are interested in. Check the description of the lot in the catalogue is accurate. Check whether there is a buyers premium payable by the buyer in addition to the purchase price. This is basically a fee payable towards the agents costs and can be 1-3% plus vat. You may need to reduce your proposed maximum bid if this is the case. Do arrange a viewing of the lot(s) - viewing arrangements will be listed in the catalogue. View any properties you are interested in. Research the property thoroughly and ask local estate agents and neighbours for their opinions. Read the Conditions of Sale - Each lot is sold subject to conditions of sale. These are in two parts (i) the General Conditions which are printed in the auctionners catalogue and (ii) the Special Conditions which apply separately to each lot. Instruct us to view the auction pack and report on any matters which could impact the future saleability of the property. This is especially important where you are having a mortgage as matters could be included within the auction pack which would mean the property is unmortgagable and you would then not be able to proceed with the purchase and be in breach of contract and lose your deposit and be subject to other costs or claims. If any searches are not included in the pack you solicitor can advise you and obtain these. We can normally inspect the auction pack at the auctioneers office where it is local. Otherwise, the seller’s solicitors will provide a copy of the auction pack, but there is normally a charge for this. Carefully read the conditions printed in the catalogue. Always get legal or professional advice from a solicitor and, in appropriate cases, a chartered surveyor. Note it is normal practice for the buyer to pay the costs of the searches and the amount should be stated in the contract. You should also consider having a full survey done to protect yourself. Perhaps the property is for sale because it's got serious structural problems which a simple valuation may not pick up. It may cost more but it will save you from a potential huge loss. If you bid for a property, it is assumed that you have made all the necessary enquiries beforehand. After the fall of the hammer it is too late for second thoughts. If you have any doubts or concerns, do not bid for the property. Arrange any surveys well in advance. The local agent holding the key will be pleased to cooperate with your surveyor. Make financial arrangements to ensure you have a 10% deposit ready for payment on auction day, when the contracts are signed and access to the remaining 90% normally within 28 days. Since you will enter into a binding contract at the fall of the hammer and pay a substantial non-refundable deposit, it is essential that all financial arrangements are made well in advance. This is particularly important if you need to arrange mortgage finance. If this is the case it must be sorted out well before auction day. You will normally be expected to complete the purchase and pay the balance of the purchase price between 14 and 28 days after the auction date. Plan ahead if you need mortgage assistance. It's wise to arrange a mortgage in principal with a bank or building society before buying at auction. You could lose your 10% deposit if you fail to complete within the time given (normally within 20 working days). Be aware that buying at auction is a binding commitment and carries the same legal implications as a signed contract by private treaty. In most cases, auction offices have copies of legal documentation provided by the seller's solicitors which can be sent to you. Auction day Remember to take two forms of identification, cheque book and all your banking details with you to the auction. If possible, arrive early and familiarise yourself with the empty auction room. On arrival, you may need to register with the auction house in order to bid prior to the start of the auction. Check with your auctioneer. On arrival, get a copy of any addendum sheet. These are distributed around the auction room and contain late information or alterations. Don't assume that all the properties included in the catalogue will be offered on the day of the auction. Some may be withdrawn or sold prior to the auction. Take a seat or stand somewhere in the room where the auctioneer will able to see you bidding clearly. When placing a bid, make sure you gesture clearly at the auctioneer. Subtle twitches and winks will not be picked up. Either raise your hand, nod or shake your head clearly. The auctioneer will warn the room when he is concluding a sale. If a property fails to reach its reserve price, don't give up! The vendor may decide to accept your bid later at the end of the auction. Make sure you leave your details with the auctioneer. Don't forget that the property becomes the buyer's insurable risk as soon as the hammer falls (i.e you should place buildings insurance in force on the day of the auction as soon as possible). The conditions assume that the buyer has acted like a prudent buyer. If you choose to buy a lot without taking these normal precautions you do so at your own risk. If your bid is successful you are legally bound to buy the property and will need to put a down payment deposit there and then of 10% of the property's price. You would sign the contract (which you have seen beforehand) in the sale room. The seller is legally bound to complete on the day. You would pay them the rest of the price (ie 90% and payment of any buyers premium and searches) on the completion date stipulated in the contract, unless you agree to complete earlier. Drawbacks at buying at auction One is that you'll need to have got your valuation and survey, conveyancing and mortgage finance sorted beforehand. Even though you've paid up to a few hundred pounds for these, there is no guarantee you'll be the successful bidder. You also have to move fast and there is much greater uncertainty than buying a home the normal way - until the auctioneer's hammer falls on the highest bid. After you have bid at auction your solicitor cannot clarify any matters relating to the property so you should satisfy yourself on all points prior to the auction. Some properties at auction are there for a reason i.e they cannot sell whether due to the property area or structural problems. Auction Buying Tips Don't buy a property before you have sold yours if you are relying on that sale to buy at the auction. Don't buy a property without having had a survey done. Not only will you limit the potential nightmare of building problems but you'll also have a basis on which to bid, as well as knowing your mortgage limit and how much of a deposit you'll need. Always set a price limit on the property.Don't get carried away and exceed it.

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