Guide to buying property at auction

Step 1: Source

Future auctions as far in advance as possible. Identify those property lots which suit your needs and interest you and contact the auction house for further information.

Step 2: Viewing

Call the auction house to find out about viewing arrangements. The Auctioneer will either take a deposit for the keys and you will view the property unaccompanied or they will organise for a local agent to show you around independently or as part of a group.

Step 3: Finances

Work out how much you can afford - your maximum price. Estimate your total costs including; repairs, decorations, solicitor’s fees, survey, mortgage, removal charges, furnishings, etc, and add this to the amount that you will need to borrow. Remember that if your bid is successful, you will need to put down a 10% deposit immediately – you will need to ensure that you can cover this. Usually you will also be expected to complete within 28 days, for this reason you will need to have a firm offer of a mortgage. Arrange this now and inform lenders that you intend to buy at auction. Please contact our finance partner, John Charcol to discuss your mortgage requirements.

Step 4: Legal

Arrange legal assistance, either a solicitor or licensed conveyancer. Legal enquiries such as Local Authority and Land Registry searches need to be carried out before you bid. For a fee of around £10, auction houses usually provide a 'legal pack'. This contains legal documents outlining special conditions of sale and title deeds' details. Now is the time to inform the auction house of your serious interest in the property – they will then keep you informed of any changes relating to the property or the sale.

Step 5: Survey

Lenders will require a survey to be carried out, to gauge a valuation. If you yourself are in the least bit dubious about the condition of the property you should get a full survey.

Step 6: Buy prior to auction

If you desperately want a property and want to eliminate the risk of being outbid you can always submit an offer in advance of the auction. If the vendor likes your offer and thinks it to be fair they may accept it and withdraw the property from the auction.

Step 7: Visit an auction sale

Before you go to an auction to buy, visit an auction sale. See what happens, experience the atmosphere and get an understanding of proceedings.

Step 8: Payment terms

As soon as an auction sale is finished and if you are the successful bidder, you will need to put down a 10% deposit immediately. You will need to know what types of payment the auction house accepts. Some accept personal cheques but most of them prefer bankers drafts and building society cheques. Get the amount made out to 10% of your maximum price – if you secure the property for less the auctioneer will refund you the difference.

Step 9: Call ahead

Before you set off for the sale call the auctioneer to double check that your lot is still going to be offered.

Step 10: Be early

This will enable you to get a seat, hear the auctioneer's announcements and speak to a member of staff if you have any last minute queries. It will also give you time to register your interest to buy.

Step 11: Bidding

When your lot number comes up the auctioneer will announce the address. At this point check it is the lot that you have come to buy. When you registered your interest to buy you may have been given a card, you should wave this at the auctioneer to make a bid. Otherwise use your hand or catalogue to signal a definite intention to bid and catch the auctioneer's eye. If he receives a bid higher than your own he will return to you in case you wish to better it. He will also warn you when the bid is about to be closed, usually three times "for the first time, for the second time, for the third time and final time – sold!" Remember to stick to your maximum price – do not get carried away.

Step 12: Success

Usually a property will have a reserve, if you meet it the vendor is legally bound to sell to you. If your bid is the highest and the reserve has been met you are the winner. Now you will need to fill in a purchaser’s slip requiring details such as your name, address, contact information and that of your solicitor. Next comes the signing of the memorandum of sale, which you will exchange for the vendor's part as soon as it's ready – this is your contract and should be sent straight to your solicitor. You will also be asked for proof of ID and your 10% deposit.

Step 13: Insurance

Once the gavel comes down the property becomes your responsibility. The auction house or your solicitor should be able to advise you.

Step 14: Balance of payments

The balance of payment usually needs to be transferred within 28 days of the auction or the time-scale set by the vendor. Remember, if this is not achieved you will forfeit your 10% deposit.