While traditionally sales of properties happen by private treaty (tender), an increase in the number of auctions now taking place is being reported in the newspapers.
Allsop’s director of auctions, Robert Hoban, recently stated that while “a tender has been the method favoured by agents; …discomfort is often expressed over the concealed nature of the process, and the lack of visibility.”
If you are considering bidding on a property at auction, it is crucial that you bear in mind that if you are the successful bidder, you will be required to sign a binding Contract there and then and pay over 10% of the purchase price as the Contract deposit.
Before the auction takes place, you should arrange with your solicitor to review the Contract for Sale and the title documents so that you know the nature of the title that is on offer, if there are any sitting tenants, if planning documentation is in order etc.
You should also arrange to have the property surveyed in advance of the auction.
If you need to arrange finance to purchase the property, as most do, you should have loan approval in writing from your bank or building society.
Of course, one of the most important (and difficult) decisions to be made when considering bidding on a property at auction, is the maximum amount that you are prepared to pay. It is very easy to get swept away with the adrenalin-inducing auction process, especially if you believe that the house is your “dream home”. Beware of this tendency and set a figure that you will not exceed and stick to it.
If you are considering bidding on a property at auction, and need the Contract and title documents reviewed in advance, please contact Bernadette.