What Services Does JMW Offer During the Auction Process?

At JMW, we are able to provide a variety of services to people looking to buy a new home at a property auction. We can help prospective buyers to:

• Inspect or survey the listed property
• Check through the auction contract and other associated paperwork
• Discuss mortgage options
• Assess the searches included in auction sales packs
• Understand the title deeds and agreement

Our solicitors are also able to help those hoping to make a sale at a property auction. The services we offer to sellers include:

• Drafting of auction contracts and packs
• Advice on searches to include in the sales pack
• General legal advice and guidance

For both buyers and sellers, we offer vital legal support at all stages of the property auction conveyancing process and beyond, including ancillary matters regarding registration with HM Land Registry, planning permission and development, and associated matters.

How Do I Sell a Property at Auction?

To sell a property at auction, contact a solicitor at your earliest opportunity. The solicitor for your property auction will prepare legal documents that the auctioneer requires. This makes up the legal pack for the auction that is presented to potential buyers.

The auction legal pack contains vital details regarding the land or property and specific terms of sale that may influence any decision to buy. The auction pack functions in much the same way as the contract in a traditional purchase, and may include the following details:

• Official copy of the Register of Title (showing who owns the property)
• Land Registry and local land charge searches
• Special conditions of sale
• A Property Information Form and a Fixtures and Fittings Form
• Leasehold, management and tenancy agreements
• Planning permissions
• Any replies to pre-contract enquiries

In order to prevent disagreements after the sale is finalised, your auction property solicitor can also provide advice on costs and the completion date (i.e. when the property must be vacated for a new owner). They will handle the creation of the auction pack and any additional documents, and review the contract terms to make sure you are protected. The team at JMW will represent you throughout this process and take the necessary steps prior to the auction to make the process as smooth as possible.

How Do I Buy a Property at Auction?

Buying a property at auction starts with a copy of the auction catalogue, which will help you to choose a property in advance and take your pricing range into account. Once you have determined which property is best for you, get in touch with the seller to schedule a viewing. You can determine how much work has to be done on the property and whether the location meets your needs by actually seeing it.

Look for nearby properties that are for sale but are not listed in the auction catalogue, so you can compare prices and value. Keep in mind that time is of the essence, as there are typically only a few weeks between the publication of the catalogue and the auction.

A legal pack for each individual property should be supplied upon request, in addition to a catalogue. This will include the outcomes of any property searches as well as other pertinent legal data. Reading the legal pack before making a bid is essential. Before the auction, your auction conveyancing solicitor will make a request for the legal package and carefully analyse all of the contract's provisions and fine print. They can then indicate any potential problems or risks associated with your purchase.

On the day of the auction, you should arrive with 10% of the property price as a deposit, and you should be ready to deliver the remaining ninety per cent in the following 28 days.

What Are the Benefits of Selling Your Property at Auction?

There are a number of reasons why selling your property at auction can be beneficial. One of the main benefits is speed - a conveyancing transaction may be completed much more quickly than with a traditional sale. If no setbacks arise, the entire process (from signing up with an auction house to completion following the day of the sale ) can be finished in as little as eight weeks.

A winning bidder must agree to acquire the property after their offer has been accepted. The moment the hammer strikes, the sale deal is considered to have been completed legally. A deposit, often 10%, must be made right away, and the remaining balance must be paid within 28 days. The buyer must forfeit their deposit if the seller doesn't fulfil their end of the bargain, and this often means that a seller can find a buyer and complete the sale much more quickly.

Further, the catalogue selling price will be chosen to promote bidding among those participating in the auction. Competition among bidders on the day of the sale can increase the sale price and allow you to make more money than if you were to sell conventionally through an estate agency. By setting a reserve price, you can maintain more control over the transaction. The property will be withdrawn from the auction if the auctioneer does not receive any bids that exceed the reserve price, which is the minimum amount you hope to make from the sale.

With this said, while house auctions can be a quicker way of buying or selling property, they can also be riskier, especially if you haven't prepared fully and sought expert legal advice. If you are thinking of buying at a property auction, you should first consult specialist real estate residential solicitors to best safeguard your rights as either a buyer or seller.

Do I Need a Conveyancer Before the Auction?

It is not legally necessary to hire a conveyancing solicitor before buying at auction, but it is best practice to do so. The team at JMW can provide a range of services in addition to reviewing the auction legal package that will aid you in deciding whether to bid or not on the auction day. This could involve using an auction title checker to look into the property's ownership, any leasehold problems, and any liens (such as unpaid mortgages) that may be attached to it.

A pre-auction report evaluates all of the documentation that is available, identifies any that is missing, looks into legal ownership, and flags any potential dangers for a buyer. As such, working with our experienced property auction solicitors from the outset of the process is the best way to protect your finances and your legal position.

What Are the Typical Auction Fees for Buying and Selling?

There are several possible fees that buyers will have to pay. An administrative charge that is paid to the auction house is typically included in auction fees for purchases. This might be a flat charge or a percentage of the sale price, and aims to cover the costs of the auctioneer. This will be subject to VAT and is paid along with the deposit. A "buyer's premium”, which is an additional percentage fee added to the winning bid during an auction, may also apply if the auction brochure declares this. You must factor these costs into your budget for a property purchase in addition to the necessary auction conveyancing costs.

Those selling at auction are required to pay an entry fee that goes toward the costs of the auction itself, the catalogue, and any prior marketing and promotion. This will be paid in advance at some auction houses or may be collected after the contracts have been exchanged.

If a deal is successful, sellers must also pay a sales commission. This commission will be specified in the contract the seller signs at the beginning, and it may again differ from one auction house to another. Only after the transaction is complete is the commission due, and it is subtracted from the winning bidder's deposit.

Do I Need to Have Finance in Place Before Buying At Auction?

If your bid is accepted on the day, you will need to pay a deposit of 10% of the purchase price immediately. You will then be expected to provide proof of funds to the auctioneers. As such, ensuring all of your finance is in place before making a bid on a property at auction is vital, as you will otherwise be unsuccessful with your purchase.

Cash buyers will have to prove that they have the money, and if you are purchasing property at auction with a mortgage, you must arrange an agreement in principle before making any sort of bid.