Before the auction
Once you’ve found the property you’d like to buy, you now need to prepare for the auction. Here’s a list of all the things you need to do beforehand:
Offers prior to auction
You can submit an offer before the auction which, if suitable, is forwarded to the seller. If this is accepted, your purchase will go ahead and when contracts have been exchanged, the property will be withdrawn from the auction.
This is by far the most exciting part of buying or selling at auction.
But make sure you’re prepared. Before the auction, contact the auction house just to make sure the property is still available.. You’re now ready to start bidding!
|What do I need to bring?
You’ll need two forms of identification, your auction catalogue, your solicitor’s details and your deposit, because if you are successful you will need to pay this when contracts are exchanged which happens on the fall of the hammer.
It’s also a good idea to arrange for your buildings insurance policy to start once the hammer falls. For some leasehold properties this might not be necessary, your solicitor will tell you this.
This can be a banker’s draft, a building society cheque, or a personal cheque.
At some auctions there may also be a contract documentation fee, which is usually around £500 plus VAT.
Before bidding begins the auctioneer will check that everybody has a copy of the ‘Addendum or Announcement’ sheet and will read out any last minute alterations to the catalogue details.
When the property you are interested in comes up, make sure you know the maximum price you can afford to pay – it’s easy to get carried away!
Once bidding begins, potential buyers will be asked to make their bids clearly either by raising their hand or a copy of the auction catalogue. And don’t worry, you can’t buy a property by scratching your head.
Once the final bid has been put forward the auctioneer will signal that it is about to be accepted by using the phrase ‘going, going, gone’ and bang the hammer to close the sale.
If a property fails to reach the reserve price, it will be withdrawn from the auction and the auctioneer will invite anyone still interested to talk afterwards. Sales can still be made if a price is agreed with the seller.
What if I can’t attend?
If you can’t attend then you can arrange for someone to submit bids on your behalf.
They’ll need your written consent and you should agree limits before bids are submitted. If you want someone from the auction team to do this you should contact them at least two days before the auction.
You could also submit telephone bids to a member of the auction team who’ll be in the auction room. They’ll then make bids on your behalf. However, attending the sale is by far the best way to bid. If you bid by phone you’ll miss out on the exciting atmosphere in the room.
You've Done it!
Once the hammer falls, contracts are legally exchanged. The contract is signed and the deposit handed over immediately. The auctioneer is legally entitled to sign the contracts on behalf of the buyer and seller if necessary..
Completion of the sale
The completion of the sale takes about 28 days, however for some properties this could happen sooner. This will be stated in the general conditions of sale in the auction catalogue or as a special condition of sale in the legal documents. The balance of the sale will be paid on completion. A solicitor will normally deal with this part of the sale.
Getting ready to sell
There are many advantages to selling at auction, it’s quick – the whole process takes around six weeks, there’s no chain and when the hammer falls your property is sold.
Selling at auction also widens the potential market, not only will there be buyers who want to make it their home, there’ll also be investors, developers and property dealers interested in buying. In many cases an auction could prove to be the best method for selling your property and not just a last resort.
Finding out what your property is worth
Once you’ve decided to sell you then need a full auction appraisal to find out what price you can expect to achieve, the likely timescales and costs involved.
You should choose an auctioneer carefully as this can make all the difference as to whether you achieve the best price. It may be tempting to go with the auctioneer who quotes you the highest price. But if your property doesn’t sell, you could be left with the auctioneer’s and solicitor’s costs and a home you still need to sell. It may also be tempting to use the auctioneer that quotes the lowest fee, but are they really going to spend the money on marketing your property? One extra bid could more than cover a slightly higher fee.
Entering a property for auction
You will need to register your property at least six weeks beforehand to have it included in the catalogue and allow the auctioneer time to market it. A good auctioneer will market your home in the local or national press, distribute the catalogue to potential buyers, and keep you fully updated with the response.
You’ll also need to appoint a solicitor who will help you with the terms of business that must be signed to enter your property into the auction. Your solicitor will also help in preparing the contract of sale and supporting legal paperwork. Again, a good auctioneer will liaise with your solicitor fully, ensuring everything is in place for the auction sale.
Marketing your home
Once the marketing of your property begins, the auctioneer may receive offers on it before the auction. These will be forwarded to you straightaway. Sometimes these are unrealistic and a good auctioneer will arrange with you to only advise when the offer is significant. If your property is sold before auction, it will be withdrawn once contracts are exchanged.
The reserve price
A lot of people are put off from selling at auction because they’re worried they will lose money if bids are very low. Don’t worry, you should talk to your auctioneer about setting a reserve price, which is the minimum price you want your home to be sold for. This is normally set in principle when you instruct the auctioneer. It safeguards you from setting a reserve that is too low or too high. It’s confidential and will not be disclosed to anyone.
Things we have to tell you
YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT.
Written quotations available on request. All loans secured on property. Life assurance is usually required.
Sequence only provides information on repayment mortgages.
Trading name of Sequence (UK) Limited, Registered in England and Wales Registration number: 4268443
Registered Office: The Bailey, Skipton, North Yorkshire BD23 1DN.
To contact your nearest office, look in your local property press, Yellow Pages or visit our website sequencehome.co.uk
For Regional and Country-wide property auctions visit the links on this web site (top right).
Sequence is a member of the Ombudsman for Estate Agents.
No warranty is being given as to the quality, suitability or accuracy of any of the goods, services, advice or information to be provided by the outlets or providers referred to in this web site guide to Buying and Selling at a Property Auction.