When buying a house, not many of us venture into the unknown process of auctions. We have all heard they are fast paced, adrenaline inducing and once the hammer falls there is no return. In the current limited housing market, we have to consider all buying options available to secure that dream home. In this piece we will break down the process of auctions, it really isn’t that scary as long as you remember preparation is key!
Considerations before the auction
Finance comes first, securing your mortgage approval in principle is a must before the auction. Once the auction hammer goes down and you are the successful bidder, you have entered a binding contract and will be required to pay a non-refundable 10% deposit as well as registration fees to the auction house .Generally there is a requirement to pay the remaining balance on the property within 28 days, for this reason, having your finances sorted ahead of time is essential.
Once you spot a property that you are seriously interested in, contact the auctioneer and arrange a viewing. If you think it is a property that you might be interested in buying, it is at this point that you should engage a surveying company to undertake a survey of the property. This will give you a full picture of the structural integrity of the property and an idea of what repairs may be required. Your engineer should also check the map to ensure that the property and area included in the auction corresponds with what is on the map and check the property is fully compliant with planning permission and building regulations.
Engaging a solicitor is another item on the list pre-auction. They will request and review the documents prior to the auction and raise any queries that are necessary with the seller’s solicitors before you buy. This will give rise to any title anomalies which may hinder the process after the auction. Remember here at Lintil we can introduce you to all the professional service providers you will need, just login and request.
In contrast to the way auctions are portrayed on TV scratching your nose or nodding your head won’t tie you in to buying a property you don’t want. When the auctioneer suggests a bidding price, raise your hand clearly if you would like to make a bid. We would always recommend you attend an auction to get a sense of it before you attend the auction with your property. Remember once the hammer falls you are legally obligated to make the purchase. Having said that, if you are attending an online only auction you will be covered by the Consumer Rights Directive which entitles you to a 14 day cooling off period.
Before attending the auction remember to have your budget in mind and know your maximum bid limit. It is easy to get carried away at an auction so having this written in front of you on the day is a good idea. When creating your budget, don’t forget to take stamp duty into account.
Once you hear the auctioneer saying ‘going once, going twice’ if you haven’t made a bid it is your final chance to. Once he says ‘sold’ the highest bidder is legally bound to buy the property. Once the property is yours remember you will need your mortgage protection and home insurance.
Best of luck with your auction experience and remember to login to Lintil for any introductions or guidance that you need along the way. See some handy auction explanations below:
- Asking price: This is a guide price for what the property is expected to sell for.
- Reserved price: The property won’t be sold for less than this figure.
- Lot: An item or set of items for sale in an auction, lots are normally denoted by a "lot" number.
- Outbid: To submit a maximum bid that is higher than another buyer's maximum bid.
- Competing bid: During a sale, the auctioneer may be accepting competing bids for an item from various sources, for example, bids from an in-house audience, telephone bids, book bids, absentee bids, other bidding platforms.