Auction Guide

Guide to buying at the auction

Buying at auction can be a simple and easy business. It is a great way to buy a property at a fantastic price, just make sure you do your research beforehand. People buy at auction for lots of reasons, they might want to move quickly, or they could be looking for a repossessed property, a plot of land to build on or quite simply they want a quick purchase without the risk of gazumping.

The key difference of buying at auctions is that when you make your offer, it is a live bid in the auction, and if yours is the winning bid contracts are exchanged upon the fall of the auctioneer’s gavel. You are legally bound to buy from that point. You will pay your deposit immediately and complete within the timescale defined in the legal documentation for the lot. This will normally be 28 days but can be sooner or later so be sure to check before bidding.

On completion you will pay the balance of the purchase costs, so you need to complete all your checks and enquiries before bidding. If you do require mortgage or other finance to buy, be sure all your funding is in place.

Whilst you are bound to complete upon the winning bid, you have the comfort that the seller is similarly bound, so there is much greater certainty when compared to an offer through a traditional estate agent. We offer a huge choice of property types and styles across the UK, so for the investor this can take out a lot of the leg work.

Guide and Reserve pricing

A Guide is a marketing figure to indicate the minimum price the seller is willing to start the bidding at. The sale price is dependent on the auction that day and how many bidders are interested in it.

Each Lot is offered a Subject to Reserve Price. This figure is set between the auctioneer and seller before the auction commences. The reserve is no more than 10% above the Guide price.

Legal Packs

Always read the legal pack!

Legal packs are prepared by the seller’s solicitor, they can be downloaded via the property page on the website. These include:

  • Official Copy of Register of Title (Office Copy Entry)
  • Land Registry and Local Searches
  • Special Conditions of Sale
  • Property Information Form
  • Fixtures and Fittings Form
  • Management Information
  • Leases
  • Tenancy Agreements
  • Planning Permission Documentation

We recommend that the legal packs are inspected by the bidders and their solicitors prior to bidding on the auction day.

Mortgages and finances

Unless you are a cash buyer it is advisable that you have your mortgage or finances agreed in principle before you bid. This needs to be in place for you to complete within 20-28 days or the arranged timeline of completion. However, now there are specialist short term bridging finance options available, this will enable you to complete on your property with temporary funds before your long- term mortgage is put into place. You will still need the funds to pay the deposit on the day of the auction. The reality is that time constraints will prelude the use of High Street lenders unless you have an existing line of credit.

Registration

If You are interested on bidding on the day, you will need to register your details.

You will be asked for your name, email address, telephone number along with one of the following:

  • Utility bill/statement – dated within past 3 months
  • Mortgage statement from a recognised lender – dated within past 3 months
  • Bank, building society or credit union statement – dated within past 3 months
  • Current UK / EU Drivers Licence (paper version)
  • Current signed passport
  • EU member state identity card
  • Current photo card driving licence
  • Armed Forces ID card
  • Firearms or shotgun certificate

Bidding

In the auction room – Once you have registered you will be given an auction catalogue; you are then able to bid in the room. Make sure when you bid your hand or catalogue is raised high.

Phone bids – You will need to register, then you are ready to bid. A team member will call you from the auction before your Lot comes up, then they will keep you updated on what is happening and bid on your behalf as you instruct.

Online bids – You must register via our website you are ready to bid online. Make sure this is done in plenty of time of the auction day. If you win a bid one of our team will be in contact to take the deposit payment.

Bidding by proxy – The auctioneer bids on your behalf, up to and including your maximum price. The auctioneer will not bid over your maximum price at any time.

Once the final bid has been reached the auctioneer will bring his gavel down, this indicates the sale is over. If a property in the auction doesn’t reach it’s reserve it will be withdrawn. After the auction, the auctioneer or a member of the team will be happy to discuss to any unsold lots.

Registering for our Online Auctions

It is important that you make sure you register to bid well in advance of the deadline for online registration. We still have to comply with all anti money laundering regulations and because we cannot meet you at the venue, we have to rely on utilising online checks to comply with the law. All of this does require a bit of input from you so please make sure you check our website for details of registration.

When you register, we shall also require you to complete a payment page. Please note this may place your account in overdraft if there are insufficient credit funds. The payment section of the registration is available to complete six days before the auction, but don’t worry, we shall prompt you to complete this section if you have registered earlier.

For each lot we require a security deposit or “bond” of £6,150.00, being £5,000 as deposit and £1,150.00 (inclusive of VAT) contract documentation charge. You can bid on any lot you like but, if you purchase one lot and want to bid on another, you will either have to quickly pay whilst the auction is ongoing or, complete more than one payment facility. If you have any questions about this aspect of registration or the auction generally, my team are here to help so please give us a call or check out all the guides on our web site.

Before the auction

  • Make sure you have a copy of the auction catalogue, as this forms part of the legal contract between you and the seller
  • Have a look at a copy of the legal documents including the Special Conditions of sale which are available online prior to auction and in the auction room on actual auction day so as not to be caught unaware
  • Consult a solicitor about the purchase to avoid any legal pitfall
  • As with any property you want to buy, arrange a viewing of the property
  • Make sure that you’ve arranged a survey. You’ll definitely need this if you are financing the purchase with a mortgage. If you are paying in cash, you’ll want to make sure the property is structurally sound
  • If you are financing the purchase with a mortgage, then you should have a formal offer in place before attending the auction
  • You’ll need a deposit which is typically 10% of the purchase price – this is payable at the auction once you’ve bought the property
  • Some deposits may be higher so always check the Special Conditions of Sale

Offers prior to auction

If you offer on a property before the auction this will be forwarded to the seller. If the seller accepts, you will still need to pay a deposit and exchange contracts immediately. The lot will then be withdrawn from the auction list.

Deposits

Deposits are payable as soon as the gravel falls. This is 10% of the full price, minimum paid and cleared on the day by credit or debit card. You will be met by a member of the team at the contract desk, this is where you will sign the MOS and pay the deposit and any other fees.

If you’re unable to pay, the auctioneer has the right to re-offer the lot. If the property then sells for a lower figure, the seller may claim any losses from you.

It is important to note that the bank account being used for payment of the deposit must be in the name of the purchaser. If it is not, then the individual/company named on the bank account will need to be ID verified as part of our required Anti Money Laundering procedures.

Administration fees

There is a buyer’s administration fee to pay on the day along with the deposit.
£995 Buyers Administration Fee (or £595 for transactions of less than £10,000) including VAT.

Completion

The balance of the Lot is paid via your solicitor as part of the completion process.

Make sure all legal checks and requirements needed are done before you bid at auction.

Guide to selling at an auction

Selling your property at auction is quick and easy, once the gravel comes down, a deposit is paid, and the contract is signed. The complete process takes approximately 4 to 6 weeks.

If you decide to sell your property at auction, we can provide an appraisal for you with no obligation. One of our team will advise you on Guide and Reserve pricing. These are a realistic price that will create a ??

Confirm the instruction

If you decide to sell through the auction, we need to have confirmation in writing of the following:

  • Timescale
  • Auction expenses
  • Commission
  • Terms and conditions
  • Entrance fee

The entrance fee of £500 plus VAT. This is for auction marketing, online marketing and catalogue listing. We will put together a catalogue listing for approval.

Prepare your legal pack

You solicitor needs to prepare the legal pack for you this includes:

  • Official Copy of Register of Title (Office Copy Entry)
  • Land Registry and Local Searches
  • Special Conditions of Sale
  • Property Information Form
  • Fixtures and Fittings Form
  • Management Information
  • Leases
  • Tenancy Agreements
  • Planning Permission Documentation

Some properties require an EPC

The pack can be downloaded by potential buyers.

Guide and reserve price

We will finalise the guide and reserve price with you ready for the auction day. The reserve price is the minimum price you are happy to sell your property at.

Auction day

Once a bid for the property has been accepted, it is placed in a binding contract. The buyer will be required to complete a Memorandum of Sale and provide a 10% deposit within 48 hours of the hammer falling.

Upon the sale of your lot you will pay us a 2% commission fee, this is calculated on the sale price or £3000 whichever the greater. This is payable within 7 days of completion. If the sale fails to complete for any reason, the commission is payable with immediate effect.

Completion of sale

We will send your solicitors the purchaser’s contract; completion usually takes 20-28 working days. The cleared deposit funds will be paid direct to you solicitors minus our fees. If the property fails to sell on the day, we may be able to still find you a buyer afterwards.

Live stream auction

This is a great way to watch the auction, if you can’t make it in person, why not watch the bidding on live stream through our website. If you are interested in a lot and want to bid during the live stream, remember to register online in plenty of time of the auction day. You are then set up to bid in real time with the auction and see the results.

Win a bid

If you are successful and win the lot contracts will be exchanged by one of our team on your behalf.

If your bid is successful, then on the fall of the hammer, contracts will be exchanged by our team on your behalf if the sale is unconditional, or if the sale is conditional, you will enter a reservation agreement and have a 20-day period to get any affairs in order before exchanging contracts. Your deposit will be taken from the payment method you provided in your remote bidding application.

Completion

This process works the same, with a completion period of 20 working days from exchange with an unconditional sale and for a conditional sale it’s just 56 days to exchange and complete.