Buying a House at Auction

4 min read
Bidding war over property for sale. Parachute Law Solicitors explain the process of 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:

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
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.
Agree to Terms | Privacy Policy
We will reply to your message within 1 working day and will help wherever we can. If we can't help, we'll sometimes refer your query to someone who we think can. Check our Privacy Terms for how that works.

Enquiries on behalf of someone else
Whilst we understand you have the best of intentions, we cannot disclose any information regarding any of our clients to a non-client. We can only discuss a case, or confirm that we are acting on behalf of a client, with you, with express written permission from that client. We appreciate that this may be frustrating. Please understand that we are bound by strict data protection laws, which are in place to keep our clients' information safe.

Related Articles

Auction Legal Pack Review by Parachute Law Solicitors

Auction Legal Pack Review

Bridging Loan ILA from experienced solicitors at Parachute Law

Bridging Loan

Auction Pack Searches offered by Parachute Law Solicitors

Auction Pack Searches