Buying a Property at Auction

A property auction is a way of buying and selling property through a public sale, instead of listing it with an estate agent. 

Property auctions are typically held in person, although in the modern day it is becoming increasingly common to also hold auctions online.

There are different types of auctions, including reserve auctions, in which the property must be sold for a minimum price, and absolute auctions, in which the property is sold to the highest bidder regardless of the price.

How can a conveyancing solicitor help when buying a property at an auction?

At Attwells, our team of conveyancing lawyers will help ensure your auction property purchase by completing all checks and due diligence including:

• Surveying the property you intend to purchase
• Reviewing auction sales packs
• Assisting with mortgages and financing
• Reviewing all paperwork and contracts
• Finalising the purchase with the seller

What is the process for buying a property in an auction?

There are multiple steps for purchasing a property in an auction as whilst an auction can be an exciting experience, there are a lot of processes and due diligence:

• Research – Identify auctions in your local area, or online and decide which properties you’re interested in
• Secure financing – It’s important to have financing in place for how much you are willing or able to spend as many auction purchases are final
• Appoint a conveyancing solicitor – When preparing to bid on an auction property, it’s essential to use a professional to review contracts and survey the property.
• Property inspection – Auction properties will usually have an open house for potential bidders to attend. It’s important to ensure you arrange to have a professional to inspect it to get an estimated valuation.
• Auction day – On the day of the auction, you will either attend the auction house or property to bid or log into the auction online.
• Sign contracts – When you have successfully won the auction, you will have to pay the deposit and sign all paperwork which a property auction solicitor will guide you through.
• Transfer of ownership – You will then have to complete the payment, along with any additional costs such as auction fees before the property titles will be transferred to you.

What are the benefits of buying a property in an auction?

There are several benefits to buying a property at an auction vs. traditional means of going through an estate agent.

• Transaction speed – buying a property at auction can typically be quicker than buying through a real estate agent as there are no negotiations and the sale is completed on the day.
• Lower-priced property – Buying at a property auction may allow you to buy a property at below market value.
• Transparency – In a property auction, details are clearly outlined before the day of auction allowing you to do your due diligence in advance.

What are the risks of buying a property in an auction?

As with any property purchase, there are risks that buyers need to be aware of. Some of the risks involved in buying a property at an auction include:

• Potential property issues – At an auction, sellers want a quick sale so there are no guarantees that it’ll be in livable condition as the buyer may not make any renovations.
• Immediate payment – When buying a property at an auction, you must ensure you have the financing available to complete immediately. If you back out, your deposit may be nonrefundable.
• Legal issues – There could be potential issues with the property’s title, or other legal complications with the property up for auction
• Additional costs – There may be other hidden costs on top of the property sale price including auction fees.

At Attwells, we will discuss all risks and concerns that you may have about auction property purchases, to ease your mind.