Auction Conveyancing – Summary Review of a Legal Pack
As part of our package, we are able to offer a Summary Review which includes a report dealing with the following points:
Are there any additional costs or overly onerous conditions in the contract?
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?
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?
Are there any major works pending apparent from the content of the legal pack?
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?
Auction Lawyer – Full Legal Pack Review
If you require a more detailed review then a Full Review Service is available.
Therefore, it is always strongly advised to obtain 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 Attwells’ Auction Team are able to assist with facilitating completion. The following are included in this service:
Review of the legal pack and provision of a summary report to you highlighting any fundamental issues;
Arranging your signature to the transfer document;
Transfer of completion funds to the vendor’s legal representative on the date of completion;
Submission of an SDLT return to HMRC if required;
Submission of an application for registration of the transfer to Land Registry following completion;
Giving of notice of assignment to a Landlord or Management Company if required.
What is a Modern Auction?
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.
Auction 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.
Auction Bridging loan
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
Since it is for a specific short-term purpose, interest rates can be higher than traditional term loans
Since it is for a specific short-term purpose, interest rates can be higher than traditional term loans.
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 as if you overstretch and cannot obtain funding, you may lose the 10% deposit you will be required to pay on exchange of contracts.