Comment Magazine Issue 7

Homes under
the hammer
Buying a house at auction can land you a bargain, but it
always pays to do your homework first, says Ian Peach.
require mortgage finance it is essential
to get ahead of the game and ensure
the funds are available in time for
completion.
Do not assume that your conveyancer
can comply with the multitude of
obligations imposed upon them by
your lender as there can be factors
beyond the conveyancer’s control that
impact upon the ability to draw the loan
on your behalf in time. A good rule of
thumb is to ensure your liquidity for the
purchase monies before you enter the
auction room on the day you intend to
bid. The speed of completion is part of
the attraction of buying at auction, but
is also the downfall of many.
Remember also that lenders will want
to value a property themselves before
agreeing to a mortgage, and that too
can cause delay.
The consequences for failing to
complete upon a winning bid can be
serious. It is likely you will forfeit your
deposit and you will also risk a claim
for damages from the seller under the
terms of the sale contract you have
entered into.
4. View and inspect the property
Something else that may sound
obvious, but we see all too often buyers
buying at auction without even having
first viewed the property. Make sure you
view the property and are comfortable
with what you are looking to purchase.
If the property needs work, do consider
taking a surveyor or builder with you to
provide advice and cost estimates.
Viewings will usually be conducted by
the auctioneers. This provides you with
the opportunity to put questions to
them and for them to recognise you as a
serious buyer.
5. Auction legal packs
Properties sold at auction will be
accompanied by an auction pack,
which are usually available in advance
of the sale. The information in these
packs can vary widely, and it pays
to have your solicitor check them
through, paying close attention to
any special conditions attached to
the contract. For example, it is not
uncommon for the buyer to be
responsible for reimbursing all of the
seller’s costs, and that will need to be
budgeted for.
Some of the more routine property
searches are usually included in the
legal pack, but additional bespoke
searches may need to be completed if
time allows in advance of the auction
date. Some law firms, including our
own, will provide a pre-auction report
upon the legal papers providing the
opportunity for any queries arising to
be raised with the seller’s solicitors in
advance of the auction date.
6. Know your budget – and stick to it
The sale room can be exciting with bids
sometimes coming in thick and fast.
Things can get even more fast moving
when telephone or online bidders are
involved, and in those circumstances the
auctioneer works harder tracking the bids
in the room itself as well as those coming
externally.
When the adrenalin kicks in, it can be all
too easy to get carried away, so our advice
is to set your maximum budget and stick
to it. It’s worth considering bringing a
trusted partner or advisor along with
you on the day itself to rein you in from a
temptation you might regret.
In our experience auctioneers are, in the
main, a friendly bunch and are more than
happy to help and provide some advice.
It is increasingly common for auctioneers
to have their preferred solicitors who are
used to dealing with auction properties
on hand in the sale room to offer more
general advice to buyers and sellers.
Do keep in mind that they cannot offer
advice upon legal packs for any lots that
are being sold on the day.
Contact us direct
Ian Peach
Partner - Head of Residential Property
(South Coast)
023 9236 4313
ianpeach@coffinmew.co.uk
Buying a home at auction is not just
the preserve of the hardened property
investor or developer. Home buyers
looking for a bargain and to buy
and complete in double-quick time
are a common sight in the auction
sale room, but it is not for the feinthearted.
As soon as the auctioneer’s
hammer falls the successful bidder
has contracted to buy the property
and is legally obliged to complete
the transaction in just 28 days. The
parties are at liberty to agree an earlier
completion should they choose.
The key to successfully buying at
auction is preparation and homework.
A good place to start is our step by
step guide.
1. Experience the saleroom
Buying a home at auction is a very
different experience from going through
an estate agent. It can be a fast-paced
environment, with the auction lots
shifting quickly. The auction room can
be an intimidating place for those who
have never experienced it before. My
advice to anyone considering buying
a property at auction would be to visit
some sales before you buy in order to
get a flavour of the atmosphere and the
procedures, as well as to get an insight
into the values of properties being sold.
2. Choose a local auction house
Just like a local estate agent, a local
auction house will provide expert and
invaluable local knowledge. Ask to be
added to their mailing lists for future
sales and obtain sale catalogues. The
sale catalogue is where your buying
journey will begin.
3. Have your finances in place
It sounds a simple and obvious
reminder, but make absolutely sure
you have the funds available at the
time completion falls due. The fall of
the auctioneer’s hammer seals the
contract to buy and at that time a
buyer is required to lodge a deposit
equivalent to 10% of the price of their
winning bid with the auctioneer before
they leave the auction. The remaining
90% falls due at completion, so if you
Fox & Sons property auctions across the South
Fox & Sons Property Auctions cover the South and regularly hold auctions at the
Macdonald Botley Park Hotel in Southampton. Coffin Mew supports Fox & Sons at
some of its auctions in Southampton, providing on-hand advice and guidance to
those buying and selling property.
Whether buying a home, land, letting opportunity, or restoration investment,
property auctions are a busy and exciting place to visit and Fox & Sons make sure
the experience goes as smoothly as possible by giving you all the help you need
under one roof. Year-to-date, Fox & Sons has sold a total of £29,925,000 worth of
property.
Fox & Sons is part of Sequence (UK) Limited, one of the largest national networks
of estate agents throughout the country.
If you are thinking of selling or buying through auction or require professional
help and advice on auctions, please contact their property auction office on
023 8033 8066 or visit www.foxandsonsauctions.co.uk for further information.
2018 Fox & Sons
Auction dates:
9th February
23rd March
4th May
15th June
27th July
14th September
26th October
14th December
8
9