Your Guide To Buying At Auction

This guide is designed to help buyers who are new to buying at auction.

Before the Auction
Sales Particulars
Information on all properties and lots for sale, along with dates of future auctions, can be obtained by going to http://www.howkinsandharrison.co.uk/auctions.

You will have access to the current catalogue of lots for auction about four to five weeks prior to an auction sale.

If you’d like to be first in the queue, register with us to receive catalogues by email and you’ll receive a copy as soon as it’s available.

Identify auction lots
All the listed lots can be found on the first page of the catalogue.  Take a look at the properties and houses for auction and identify the lot or lots which interest you.  Once viewed, let us or the auctioneer know which lots you are interested in.  That way, we can, let you know of any changes or alterations to the listing before the sale.

Check guide prices
Guide prices reflect the Seller’s expectations.  They are not necessarily the price at which the lot will sell, nor the reserve. We publish Guide Prices for all lots for auction in the catalogue, but these are sometimes subject to change.

The following is a definition provided by the RICS for the auction of properties:
Guide Price: An indication of the seller’s current minimum acceptable price at auction. The guide price or range of guide prices is given to assist consumers in deciding whether or not to pursue a purchase. It is usual, but not always the case, that a provisional reserve range is agreed between the seller and the auctioneer at the start of marketing. As the reserve is not fixed at this stage and can be adjusted by the seller at any time up to the day of the auction in the light of interest shown during the marketing period, a guide price is issued. This guide price can be shown in the form of a minimum and maximum price range within which an acceptable sale price (reserve) would fall, or as a single price figure within 10% of which the minimum acceptable price (reserve) would fall. A guide price is different to a reserve price (see separate definition). Both the guide price and the reserve price can be subject to change up to and including the day of the auction.

Reserve prices
The sum below which we are not authorised to sell the property is called the reserve price.  This is not necessarily the starting price. All lots offered for sale are subject to a reserve price and this is usually confidential between the vendor and auctioneer.

The auctioneer has the authority to bid on behalf of the vendor up to the reserve price to ensure the property is not sold lower than the price at which the vendor has stated.

The following is a definition provided by the RICS:
Reserve Price: The seller’s minimum acceptable price at auction and the figure below which the auctioneer cannot sell. The reserve price is not disclosed and remains confidential between the seller and the auctioneer. Both the guide price and the reserve price can be subject to change up to and including the day of the auction.

Changes to information
Occasionally changes need to be made to the lot information or the special conditions of sale. Where possible you will be informed of these changes if you have registered your interest.  The auctioneer will read out any changes on the night of the auction, but you will not have an opportunity to discuss them.  It’s therefore essential that you check for any changes that may have occurred before you arrive.

Property for auction

View the property
Please call or email us to arrange a convenient time for viewing. If a property is particularly popular there may be group viewings and you will be advised if this is the case.

Obtain legal advice
It is important that you obtain independent legal advice before bidding.

The vendor’s solicitors prepare legal packs containing everything you need including, where applicable, home information packs, energy performance certificates, special conditions of sale,title deeds, leases, office copy Land Registry entries, searches and replies to pre-contract enquiries.

Email us for your copy.

Alternatively, they will be available from the vendor’s solicitor. These documents should be passed to your legal adviser to help you make an informed decision about the lot. If you need further legal information please contact the vendor’s solicitor whose details will be in the catalogue. Legal packs will usually be available for inspection in the auction room. It is important to note that you buy subject to all documentation and terms of contract whether or not you have read them.

Arrange finance
To buy at auction, you must have cleared funds available, typically 10% of the purchase price as deposit on the night of the sale. The balance of the funds will be payable upon completion which is usually 28 days after the sale.

If you do need to arrange a mortgage it is important that you obtain an offer in principle from your lender before the auction day and are confident the mortgage will complete prior to completion.

Most building societies and banks will wish to instruct a surveyor to prepare a valuation report before making a mortgage offer so you will need to make your mortgage application as early as possible.

You will usually need to complete your purchase up to 28 days after the day of the auction. You should discuss this with your lenders to make sure that this will not be a problem.

Fees
Make sure you do not forget stamp duty, legal and surveyor’s fees and mortgage fees.  There may also be a Buyer’s Premium.

Obtain a survey or seek further advice
If you wish to obtain a survey, or let an architect or builder inspect, please ask your surveyor to call us directly to make arrangements for access to the property.

Making an offer prior to the auction
You can make an offer for a property at any time up to the date of the auction. If your offer is accepted you will have to be in a position to exchange contracts and pay your deposit immediately. Some vendors may not be willing to, or able to accept offers prior to the auction.

What if I cannot attend the auction?
We recommend you attend the auction. If you cannot you should make arrangements for an agent or another party to act on your behalf and bid for the property. Please note that if you bid on a property you are personally liable for an accepted bid even if you act as an agent for another party.

We do not accept telephone or proxy bids.

At The Auction
Bidding
The auctioneer’s word is final.  The onus is upon you to ensure that the auctioneer is aware of your bid. Please do not leave your bid until the last moment. The auctioneer is under no obligation to accept a bid and the auctioneer need not explain why. If there is a dispute over the bidding the auctioneer is entitled to resolve it at his discretion. The vendor may bid or ask the auctioneer to bid upon his behalf up to the reserve price but may not take a bid equal to or exceeding the reserve price.

Auction Procedure
Auction properties will be offered for sale in lot order unless otherwise stated. Bids will be invited and normally the highest bidder over the reserve will be the purchaser. The auctioneer reserves the right to regulate the bidding and to refuse any bid at his sole discretion. He also reserves the right to re-offer the property at his discretion.

Exchange of Contract
If your bid was the highest bid at the fall of the hammer you will be deemed to have exchanged contracts to purchase the property at that point. You will then be required to sign a contract and pay a deposit, normally amounting to 10% of the purchase price.

Property Insurance
Please note that you as the purchaser are immediately responsible for insuring the property from the moment you exchange contracts.

Completion
If you are successful in buying one of the lots at auction, completion will take place 28 days after the auction date unless otherwise stated.

Understand all Terms and Conditions
Buying property at auction is different from buying property privately and we strongly advise potential purchasers to check that they have read and understood all the various legal documents and terms & conditions. Please read the common auction conditions which have been prepared by the RICS, so that you are familiar with the legal requirements for when you buy at auction.

Conditions of Sale
The property is sold subject to the General and Special Conditions of Sale prepared by the vendor’s solicitor which may be inspected during usual office hours at the solicitor’s or the agent’s offices 14 days prior to the date of sale. The Conditions of Sale may be inspected in the salesroom before the auction but they will not be read out at the sale. The purchaser will be deemed to have bought the property on these conditions whether or not he has inspected them. The property is sold subject to a reserve price. (See 2.3 of the Standard Conditions of Sale (Fourth Edition)).

Money Laundering Regulations
Please note that we are unable to accept cash or debit or credit cards. The deposit should be paid by cheque, banker’s draft or by prior arrangement, a telegraphic or electronic transfer.
To comply with the regulations, buyers are required to provide proof of identity, in the form of a photographic driving licence or passport together with a current utility bill.

For more information or help with anything to do with auctions, please get in touch with our dedicated auctions team.

 

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