What Happens At A Property Auction?
If you are a first time visitor to a property auction, then they can be daunting. Because of this, we have compiled a step-by-step guide that we hope will demystify the property auction process. The thing to remember is that auctions are just an alternative way of buying property - it's as simple as that! However, there are some things you need to know:
What is the guide price?
A guide price is simply the auctioneer’s estimate of what the property might sell for. This should not be taken as an indication of the value of the lot, or the reserve price. It is a buyer’s responsibility to decide how much they want to bid.
Most properties have guide prices published in the auction catalogue. Generally speaking Guide Prices are provided as an indication of each seller's minimum expectation. They are not necessarily figures which a property will sell for and may change at any time prior to the auction. Virtually every property will be offered subject to a Reserve (a figure below which the Auctioneer cannot sell the property during the auction) which we expect will be set within the Guide Range or no more than 10% above a single figure Guide. ALWAYS CLARIFY AND CONFIRM THIS WITH THE AUCTIONEER PRIOR TO BIDDING ON A PROPERTY. The guide prices of the properties that are listed in our database may be subject to change, so we advise that you contact the auctioneer directly to confirm the guide price prior to the auction day.
What is the reserve price?
Unless otherwise stated, each lot is subject to a reserve price. If no bid equals or exceeds that reserve price, the lot will be withdrawn from the auction. A seller may bid up to the reserve price, but may not make a bid equal to or exceeding the reserve price. If the seller is unable to attend, the auctioneer or another agent may be asked to bid on the seller's behalf. If the lot does not reach the reserve price during the auction, a buyer might be able to negotiate afterwards with the auctioneer.
What is the legal pack?
The legal pack will have been compiled by a seller's solicitors prior to the auction, ready to be sent out to the solicitors of all interested parties. This will include the sales contract, local searches and title deeds.
ALWAYS read very carefully to check whether there is a BUYER’S PREMIUM or any additional fees that you might have to pay towards the seller’s costs. This will need to be factored into your budget and should be the first enquiry made to your solicitor. Do not bid until you are satisfied that you are aware of ALL the costs, not just the sales price you purchase the property for. Any additional costs excluding the administration fee will normally be listed in the Special Conditions within the legal pack and these costs will be payable on completion. Any stamp duty and/or government taxes are not included within the Special Conditions within the legal pack and all potential buyers must make their own investigations.
What is the property auction addendum?
An addendum is extra information provided by a seller’s agents or solicitors after the legal pack has been prepared. It might show changes to the property description or other information, which may affect buying decisions.
Please read our step by step guide to help you fully understand the auction process.