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Buying property at Auction

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Over the last year or so I have noticed a steady rise with clients purchasing properties at Auction and there certainly seems to be some bargains out there.

It occurs to me however that not everyone will know much about this method of buying property so I have set out a brief guide for the uninitiated.

At auction you place a bid on a property you wish to buy. If this is accepted by the auctioneer then you enter into a legal agreement to buy the property. Typically at the end of the auction you will exchange contracts and set a date whereby you are due to complete. This is usually 21 days from the day of the auction.

In addition you will be liable for a deposit of 10% of the purchase price and will have to pay this on the day.

The important thing to remember is that once you are successful you are committed to the purchase and therefore you should consider the following:

1.      Finances – consider whether you can (1) afford the deposit (2) balance of purchase price (3) any legal fees. Are you buying with a mortgage? If so it is a good idea to have this in place before the date of the auction.

2.      Have you visited the property? Have you carried out a survey? Under the terms of the auction contact you will purchase the property on a sold as seen basis and there will be no come back if you subsequently discover something that you should have investigated beforehand.

3.      Have you obtained legal advice? As a solicitor it will not surprise you to discover that I would recommend taking legal advice but this is perhaps the most important aspect to consider. Just because the property is at auction does not guarantee that there are no legal problems with it.

4.      If you are considering buying at auction contact the auction house and express your interest in the property. They will then be able to send you a copy of the legal pack which you can then pass to your solicitor.  

If you are considering purchasing a property at auction or have any questions relating to buying property at auction please give me a call on 01623 451111 or email me on wjames@fidler.co.uk

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