Summary Review of a Legal Pack – Auction Conveyancing
As part of our package, our auction solicitors are able to offer a Summary Review which includes a report dealing with the following points:
Firstly, are there any additional costs or overly onerous conditions in the contract?
Plus, is there anything specific in the content of the legal pack which we believe is likely to cause an issue for your intentions for the property?
Do any searches contained in the legal pack contain any adverse entries?
We’ll review of the statement of account (if applicable)
Are there any arrears of ground rent, service charge or rent under tenancies apparent from the content of the legal pack?
Equally, are there any major works pending apparent from the content of the legal pack?
And are there any notice requirements of a freeholder or management company apparent from the legal pack?
Is there anything missing from the legal pack which would normally be included?
Based on the content of the legal pack, is the title to the property likely to be good and marketable?
Full Legal Pack Review – Auction Lawyer
If you require a more detailed review when undertaking auction conveyancing then a Full Review Service is available.
Our auction solicitors always advised obtaining legal advice on the contents of an auction legal pack prior to committing to a purchase. However, in the event that you do decide to proceed without the legal pack being reviewed prior to the auction our team of auction solicitors are able to assist with facilitating completion. The following are included in this service:
Firstly, a review of the legal pack and provision of a summary report to you highlighting any fundamental issues
Secondly, arranging your signature to the transfer document
Next, transfer of completion funds to the vendor’s legal representative on the date of completion
Then, submission of an SDLT return to HMRC if required
Next, submission of an application for registration of the transfer to Land Registry following completion
Finally giving of notice of assignment to a Landlord or Management Company if required
A modern auction is an auction that is conditional up until the exchange of contracts and is different from the traditional method of auction where once the hammer falls, contracts are in effect exchanged and you are legally bound to complete.
Under the modern auction method at the end of the auction, the successful bidder must place a non-refundable reservation fee with the auction agents to reserve the property.
Property finance is a type of bridging finance. When the hammer falls at the auction, you have effectively exchanged contracts, with completion following between 10 and 20 working days thereafter.
Bridging loans for Auctions
This is not enough time for most mainstream lenders to arrange completion funds – so unless you are a cash buyer a specialised Auction Bridging Loan will usually be required. Bridging Loans are usually arranged within a short time frame. Bridging finance is useful to gain capital quickly and typically is an interim solution until a lower-interest, more long-term solution can be found. As the name suggests, they exist to “bridge” a gap.
Purchase property that is unsuitable for lending from a mainstream lender
Bridge a finance gap between the acquisition of one property and the sale of another, etc
However, since it is for a specific short-term purpose, interest rates can be higher than traditional term loans.
Therefore, a properly advised client will have done their due diligence on the property before the auction and will know any issues that may be affecting the property. You should also obtain an Agreement in Principle from the lender prior to the auction so that you know how much the lender is willing to lend you if you overstretch and cannot obtain funding, you may lose the 10% deposit you will be required to pay on the exchange of contracts.