How to Prepare for a Day at a Property Auction
Andy Thompson is the Head of Auctions (North West) for SDL Auctions who sell a wide range of residential and commercial properties on behalf of both private individuals and corporate clients across the UK.
On the day of the house auction, you will need to bring your debit card or cheque-book, two forms of ID, and the contact details for your solicitor. Because there are legally set deadlines when you are buying a property through an auction house and everything happens a lot faster than if you buy through an estate agent.
What To Bring To A House Auction
Amy: If I was coming down to a house auction, either to buy or to sell, is there anything I need to bring with me? How should I prepare for the day?
Andy: Preparation is absolutely key. On the actual day of the auction, you are going to be buying the property, there and then.
You will need the money to pay the deposit (usually around ten percent) and cover any auctioneer’s fees. So, you’ll need your cheque-book or debit card.
You will also need two forms of ID. So, something with your photograph on such as a passport or a driving license and a recent utility bill.
And you will also need your solicitor’s details because that will probably form part of the contract.
Communication is key. Each auctioneer will have their own quirks and will do things slightly differently.
Buying a house is a big investment and once the hammer falls there is no turning back. So, make sure you talk to the auctioneer and run through the process with them, on an individual basis, because their methods can vary, slightly.
What Happens After The Hammer Comes Down
Amy: Wonderful. And can you tell me what happens, once that hammer comes down? I’ve made my bid, what happens next?
Andy: So that’s it, you’ve exchanged contracts. For good or ill, you can’t back out. The seller can’t back out. When the hammer falls, it’s a done deal.
The best-case scenario is that you have done all your homework, your research and you’ve bought the house you want, hopefully for a little bit less than the maximum bid you were prepared to put in.
Then, before you get the keys there is a legal process to complete.
So after the hammer has fallen, you will have (usually) twenty-eight days from that point to complete. This is where the two solicitors liaise to cross the Ts and dot the Is.
Why Buying A House At Auction Is Faster Than Buying Through An Estate Agent
Amy: It sounds to me that even though there’s quite a lot of due diligence and research that needs to be done, everything seems to happen very quickly. This is an efficient way of buying property.
I know when I bought my house it took a lot longer than twenty-eight days. So buying at auction must be very attractive for people who are wanting to get things moving fast.
Andy: And, do you know what I always say? Take a property, no. 1, Smith’s Street, for example – Let’s say you are selling it, using a local estate agent but then change your mind that and go with a local auctioneer.
The property is exactly the same. It’s still No. 1, Smith’s Street. It is still a three-bed, semi-detached, or whatever it might be.
So, for a buyer, the research process is basically the same. They’re researching the same property whatever the sales channel may be.
I think a lot of the reason that properties, sold with an estate agent, takes so much longer, is just because the people involved are not working to a deadline.
If a deadline is set then people work to it.
So, the buyer is buying exactly the same property but it will take three months with an estate agent but one month with an auction.
It’s as simple as just setting the terms. If you are paying a thousand pounds in fees to a solicitor, you could set terms that state that completion needs to happen within twenty-eight days.
In truth, I sometimes sell properties in two days. Normally this would when I’m dealing with very experienced investors.
But there is actually no reason that any property – or ninety-nine out of a hundred properties – couldn’t be completed within the twenty-eight-day term that you get with house auctions.
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