The Law Department has experience of acting for clients both buying and selling commercial and residential properties at auction.
Buying at Auction
At a property auction, contracts are legally exchanged, and both seller and buyer are committed to the agreement (and usually a 10% deposit must be paid on the day) immediately if the reserve price is met and the auctioneer accepts the highest bid. Therefore it is advisable that a buyer and his lawyer and surveyor will have undertaken all the necessary checks and enquiries before the day of the property auction.
There are a number of practical considerations that need to be taken into account when buying at an auction. The Law Department can assist you in ensuring that you are fully aware of the terms of the contract that you are agreeing to.
- Carefully check the general and special conditions of the auction contract
- Give consideration to the auction pack, including Home Information Pack, searches, replies to enquiries, and further considerations if the property is a leasehold
- Arrange an inspection or preferably a survey of the property prior to auction
- Check comparable property sales of the same type in similar area as recently as possible
- Double check whether VAT is payable on the purchase with commercial property
- Ensure that 10% deposit is available in clear funds
- Decide whether extra searches are advisable and if any of the information or searches provided by the seller out of date
- Consider whether replies to enquiries satisfactory or are there areas of concern
- Ensure funds are available to complete
- If the property is tenanted check all paperwork and status of tenancy and underlying tenancy documents.
Selling at Auction
The Law Department can prepare all necessary documents for a full property auction pack before the auction and anticipate the concerns or possible enquiries which might be raised by a buyer or his/her lawyers. The Home Information Pack will include an Energy Performance Certificate (EPC) a personal local authority search together with drainage and water search, the registered title and a Property Information Questionnaire (PIQ). There is additional information required in respect of a leasehold properties and again pre-planning by our experienced lawyers is vital.
At the Auction, once the hammer goes down on the highest bid, contracts are exchanged and completion is usually agreed to take place within 28 days.