Property Auctions – A Comprehensive Guide

Property auctions offer a distinct avenue for both buyers and sellers to engage in real estate transactions. In this guide, we’ll explore the two primary methods of property auctions and delve into their legal implications and considerations.

The Modern Method/Online Auction

Often referred to as the ‘Modern Method of Auction,’ this approach to property sales is conditional. When a buyer’s offer or winning bid is accepted, they typically pay a fee, which is usually 3.5% of the property’s value or a fixed amount, often £5000, to secure the property. Following this, the buyer has 28 days to exchange contracts and, in most cases, an additional 28 days to complete the transaction legally.

The Traditional Method

Also known as the ‘Traditional Auction,’ this method is unconditional. When the auctioneer’s gavel falls, contracts are immediately exchanged at the auction. These contracts contain a legally binding completion date, usually set 28 days after the auction. It’s worth noting that occasionally contracts may be exchanged unconditionally at auction, with a completion date as soon as 14 days later. This scenario often arises when the seller is a mortgagee in possession of the property.

Selling a Property at Auction

Regardless of the chosen auction method, we provide comprehensive assistance in preparing the auction pack for sellers. Our services remain consistent irrespective of the method selected. We request that you complete a Fittings and Contents Form and a Property Information Form. Additionally, we ask you to provide any guarantees, warranties, or relevant documents related to the property. For properties with registered land, we access your title deeds from Land Registry online and compile the contract for sale. In an auction pack, sellers are responsible for providing the necessary searches, and we’ll request search fees from you to obtain these searches on your behalf. Once we’ve prepared the auction pack, we typically upload it electronically via your provider’s portal and distribute copies to all relevant parties (the buyer’s solicitor, agent, and yourself) via email. Our commitment doesn’t end here. We remain accessible via telephone and email to address any queries prospective buyers may have and to assist with any questions arising from the review of the auction pack by a buyer’s solicitor. After the property successfully sells at auction, we oversee the conveyancing process until completion.

Buying a Property at Auction

If you spot a property you’re interested in purchasing at auction, we offer to review the auction pack documents on your behalf. We’re available for a detailed discussion through a telephone appointment or face-to-face meeting. Our standard conveyancing fees apply if you are successful in your auction bid.

We invite you to reach out to us before deciding to sell or buy at auction. We have extensive experience with both auction methods and have assisted numerous clients with various scenarios and requirements. Our track record includes clients involved in the sale and purchase of residential and commercial properties at auction, as well as those dealing with land transactions in the auction setting.