Buying a House at Auction
What should I know before buying an auction?
Before buying a house at auction, you should know what to look for. The seller's solicitor is responsible for putting together an auction legal pack. This contains all the information you may need regarding the property, such as:
- 1
Title deeds of the house
2Contract of sale
3Title plan showing the boundaries of the property
4Conveyancing Searches
5Any necessary forms (i.e. TA6 Property Information Form or TA10 Fittings and Contents Form).
6If Leasehold - an information pack relating to ground rent, service charge and major works.
Do you have to be a cash buyer to buy a house at auction?
You do not have to be a cash buyer to buy a house at auction. You can still get a mortgage, but before you participate in the auction, you need to get your mortgage in principle.
The lender will want to make sure that their investment is not at risk, so you will need to carry out all the mandatory searches on the property.
Traditional Auction | Modern Auction |
Auction takes place in a physical place. | Auction is held online. |
10% deposit will be paid on auction day. | 5% reservation fee is paid on auction day 10% deposit is paid within 28 days of auction day. |
Contracts are exchanged on auction day | You have 28 days starting from auction day to exchange contracts. |
You can change your mind, but you will lose the deposit and may have to pay penalty fees. | You can pull out of the transaction, but you will lose the 5% reservation fee. If you pull out of the transaction after you exchange contracts, you will also lose your 10% deposit. |
What are the risks of buying a house at auction?
When using this method to buy a house, you will need a solicitor for auction property to check for any hidden problems. These can range from legal aspects to physical damages. Common examples include:
- structural damage
- flood risk
- leasehold properties which have a short lease left
- covenants, which will restrict the way you can use the property
A lot of properties sold at auction have either been repossessed, or the owner has passed away and their executor is selling it. As a result, you will not always be able to find all the information you need in the auction pack, simply because the owners do not know it either.
Our experienced solicitors can review the auction legal pack and let you know of any missing documents, issues with the property, as well as if conveyancing searches are needed.
Frequently Asked Questions
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Are you worried that your dream auction property will turn into a financial loss?
We can help you by checking the auction pack and advise you on what searches to get, so that you can bid with confidence.
