Property Auction Day

 

Here's our step-by-step guide to property auction day. It's worth noting that if you are unable to attend, your solicitor or surveyor may be allowed to attend on your behalf.

Remember, in the run-up to the auction, keep an eye on the 'guide price' (this is the price listed in the catalogue). Also make sure you have made a decision on what your maximum bid will be. This will be based on your view of the property's value (having carried out viewings and local searches) rather than the guide price, and on the money you have available.

1. What to bring:

  • Required forms of ID.

  • Any completed registration forms.

  • Chequebook with at least one cheque for each lot you are bidding on or banker’s draft. You will need to verify which method of payment is acceptable, with the auction house but note that neither cash nor credit or debit cards are accepted.

  • Identification: either your driving licence or passport (photo ID) and a recent utility bill or bank statement with proof of address.

  • Your solicitor's details.

2. On arrival

Pick up an addendum sheet, which lists any late alterations, guide price changes, withdrawals or prior sales. It’s important you read this document before bidding to see if there is any significant new information. The addendum forms part of the contract of sale.

3. Start of auction

The auction will start promptly at the time printed in the catalogue and the auctioneer will make a number of announcements about the whole procedure. All pre-sale announcements are summarised in the first pages of their catalogue. Lots are almost always offered in the order in which they appear in the catalogue, so they will announce withdrawn and pre-sold lots as well.

4. Prior sales & unsold lots

It's quite acceptable to place an offer on a property prior to the auction date itself but only if you are in a position to complete the sale. The vendor is under no obligation to withdraw the property from the auction until contracts have been exchanged.

Vendors usually place a reserve price on their property. The auctioneer will announce whether this has been reached at the end of the bidding. Again, the vendor may be willing to accept an offer after the auction, in which case you should leave your details with the auctioneer who will discuss them with the vendor.

5. Bidding

  • The auctioneer will announce each lot and refer to any last minute changes.

  • The current lot number is usually displayed on a screen next to the auctioneer.

  • The auctioneer will invite bids at a particular level. When bidding, make yourself clearly visible to the auctioneer and indicate your bid with a nod of the head or raised hand. Subtle twitches and winks will not be noticed!

  • The auctioneer will regulate the bidding increments until all the bidding is finished and will give everyone a few moments warning before bringing down the gavel. This is the point at which the property is sold to the highest bidder. As soon as the gavel comes down, a legal and binding contract is formed between the vendor and the winning bidder.

  • If you are the successful bidder at the fall of the gavel, a member of the auctioneer team will approach you to complete the paperwork. Remember a deposit of 10% will be due immediately, and standard procedure is for the remaining 90% to be submitted within four weeks.

  • Remember that before the auction, you should decide on your budget and stick to it. If the bidding goes above your limit, stop bidding and start investigating the next auction opportunity.

  • If the reserve price (the minimum bid acceptable to the seller) is not met, the auctioneer will usually withdraw the property from auction. You may well be able to bid for unsold properties after the auction is finished - whether or not your bid is accepted will be up to the seller.

  • Remember that the 'guide price' quoted in the catalogue may be quite low. Depending on how much interest there is in the property, it may sell for considerably more - don't allow yourself to get carried away and stick to your budget.

6. If you're the winning bidder

  • You will be asked to fill out a purchaser's slip and provide identification. In the case of individuals, the auctioneer will need to verify both your name (i.e. passport or driving licence) and address (i.e. recent utility bill or bank statement).

  • You'll need to provide a cheque, drawn on a UK clearing bank to cover the deposit. This is normally 10% of the purchase price and subject to the stipulated amount. Cheques will be banked the same or next day so you should ensure that there are sufficient funds available. It's part of your legal obligation to pay the deposit on the day of the auction.

  • You'll also have to pay a buyer's fee for each lot purchased in addition to the deposit. Details are printed in the catalogue or available on the auctioneer’s website.

7. What's next?

As the winning bidder, you will be given your part of the contract plus a copy of the ‘notices’ and ‘general conditions of sale’ which contain the auctioneer’s standard terms of sale.

The special conditions of sale are contractual terms that are specific to each lot offered. These are not printed in the catalogue but will be attached to the contract. Your part of the contract should be passed to your solicitor. The auctioneer will retain the part that you have signed to send to the vendor's solicitor. Completion will usually take place 20 working days later (or as varied by the special conditions of sale) under the supervision of your solicitor.

Please do not leave the auction room without taking your signed contract as the property is at your insurable risk from this point forward. You must also ensure that you arrange your building insurance immediately after the sale.

Please note: Properties are not sold "subject to contract", "subject to finance" or "subject to survey" when bought at auction. They are sold unconditionally and as a successful bidder, you are legally obliged to complete the sale.

Remember, after purchasing a property, contact an insurance broker to arrange insurance cover. You usually have up to 28 days after the auction date to complete the purchase. However it can be as little as 10 days.

TOP TIP... New to auctions? They can be quite intimidating if you have never attended one before, so it is a very good idea to familiarise yourself with the setting, the auction process and the role of the auctioneer before you go. Sit in on one first before you join in - bidding isn't for the fainthearted!