Auctions can be a desirable way of selling your property or land, as you can often gain the best possible price for your property and avoid last minute hitches.
Why sell at auction?
The increase in demand for good quality properties can also lead to the sale price being driven up and rural properties are particularly popular at auction.
An additional benefit of selling at an auction is knowing that once the hammer falls the contract is legal and binding, as the successful bidder is considered as having signed the contract at that point.
The purchaser has to pay a 10% deposit on the day of the auction and must usually pay the balance within approximately 28 days. This avoids the uncertainty sometimes associated with selling your property in a conventional manner, for example the chance of your buyer pulling out prior to completion becomes negligible as, if they did, they would lose their substantial deposit.
Our Services for Sellers
The role of a legal advisor in auction sales can sometimes be a mystery. Our role is to produce in advance an auction pack, which provides all the necessary information a potential purchaser will need to enable them to make an informed decision about their purchase.
The auction pack includes the title deeds and relevant searches but can often contain much more information as well, so that a buyer can be ready to commit themselves to a purchase.
We look at the transaction from both sides i.e. from the seller’s side and the purchaser’s side, at the same time. In producing an auction pack we anticipate what a purchaser would need; for example, although an auction purchaser would not normally have a mortgage in place because of the uncertainty regarding the final price, in providing all the necessary searches that a mortgage lender would require a purchaser who does require a mortgage would be more prepared to secure a mortgage and would potentially become a viable bidder.
The more viable bidders at the auction the better the chance a property has of reaching the best possible sale price.
Our Services for Purchasers
We also offer services to purchasers at auctions. Our services are usually split into two parts:
- We can look at the auction pack for a property or land that you are interested in and prepare a report for you, which will ensure that there are no nasty surprises if you commit yourself to the purchase on the auction date.
- We will also offer a completion service whereby we will deal with your completion, your Stamp Duty Land Tax and registration of the property or land into your name on completion.
Why Buy Property or Land at Auction?
Auctions give purchasers certainty that the normal conveyancing process cannot. As a conventional purchaser you may have to commit time and money in advance to inspect a property or land and carrying out any surveys you feel are necessary, whilst not knowing for certain that the seller won’t back out. At an auction the seller pays for any necessary searches in advance and these are only reimbursed to the seller by the purchaser on completion.
Most potential purchasers will still want to visit the property and possibly have a survey done on the property. However once this is done and the purchaser has decided how much they are willing to spend they know that if they are the highest bidder on the day then the property or land is theirs.
Financing Your Purchase
As a purchaser on the auction day you will usually need to have 10% of your purchase price in cleared funds as a deposit.
On the auction day the estate agents may also have a fee as a contribution towards their marketing costs. The details of this will be in the estate agents’ Sales Particulars contained in the auction pack.
When completion takes place you will need to have the balance of the purchase price and may also pay to the seller additional sums for searches or providing documents. This will all be laid out for you in a Completion Statement by us so that you know exactly how much you need to have available for completion.
Exchange of Contracts and Completion
Exchange of contracts takes place the moment the hammer falls on the highest bidder at the Auction.
Completion is usually 28 calendar days later but can be varied.
Seeing a legal advisor provides valuable protection but it is important for clients to know how much the service is likely to cost.
We will be happy to give you a written quotation, which includes our costs to do the work involved in your sale or purchase and the cost of other fees that are payable such as Land Registry fees, search fees and Stamp Duty Land Tax, which are known as disbursements.
Related Legal Matters
Buying a property may introduce other related legal matters. For example:
- If you are buying a home with someone you are not married to, you may need to enter into a ‘Deed of Trust’ to set out what share of the property each person owns;
- If you do not have a Will, you should consider making one; and
- If you do have a Will, you may have to update it
In all cases we can offer you legal advice as part of a complete professional service.