The Beginners Guide to Bidding at Auction
Providing you have the funds and the time, buying a property can be a challenging, but ultimately rewarding process. On average, properties go for between 60-90% of market value, and you will have access to flats and houses that aren’t available to anyone who requires a mortgage (i.e. 90% of the home buying demographic.) Nearly all the properties available fall into 3 categories. 1) Short lease. These tend to be in good order, but if the lease is less than 70 years you can’t get a mortgage so they have to go to cash buyers only. Most estate agents won’t take them on as they hardly ever see anyone in that position. 2) Requiring so much structural work that they are unmortgageable. Banks won’t lend on anything that doesn’t meet the health and safety definition of a home. That also includes if the kitchen or bathroom has been knocked out. 3) They have come through probate or a trust and the seller’s representative has a legal obligation to get them the highest possible sum in a set time period. This will usually include repossessions, apartments where someone with no heir has passed away or when the will is being disputed and contested and asserts need to be liquified.
Before the day
- Please alert your solicitor in advance that you may be purchasing at auction. Once you have viewed and assessed the properties, you can send over the legal paperwork which should be made available by the auction house, which should be viewed by your solicitor before the sale. They should also be aware that if a purchase is made they will need to act swiftly.
- Pre-register if bidding online, by phone or by proxy. Register separately for each lot you are interested in.
- View the property carefully, ideally with a builder or professional.
On the day
- Please bring photo identification, proof of address and solicitors details for any parties either bidding on or purchasing a property together with a method of payment for 10% of the purchase price as a deposit together with an administration fee of roughly £900 inc VAT, depending on the auction house in question. Lots move slowly, you can always ask ahead what time they expect your desired propertied to come up. Don’t arrive at 9am for lot 50, it’s probably going to be closer to 3pm.
- Payment on the day can include: personal debit card, cheque, bankers draft, Barclays Pingit or a bank transfer at the auction. Please make cheques payable to ‘Savills (UK) Limited’. Company/Commercial payment cards are not accepted – please note that buyers will be charged 1.55% of the transaction value for company credit and company debit card payments. In the event that a company card is used, an invoice will be sent to the buyer post-auction.
After the sale
- The remaining sum, with stamp duty and fees should be transferred to your solicitor, shortly after, as per a usual property purchase. Completion usually takes 20 working days (though this period can vary, always check the legal documents for each property) from date of exchange under the supervision of your solicitor.
- Keys will be available on completion. Access to the property before that date can usually be arranged under supervision of the seller’s solicitors.
**** Please note that properties being sold at auction are being sold unconditionally. If you are the successful bidder you are legally obliged to complete the sale.