Selling or purchasing property at auction has a number of advantages to both buyer and seller. Much of the trauma and delay associated with a property transaction is eliminated, as the date of both the auction and completion for a sale is fixed, the contract for purchase being binding at the fall of the auctioneer's gavel.

If there is strong competition between would-be-buyers, or as a vendor you wish to dispose of property quickly, this method of sale is often an excellent way of achieving a premium price on sale.

SELLING AT AUCTION:

• Contact the Auctioneer who will make arrangements to call and meet you at the property where he can advise on the auction process, costs and commission charges and any charges that may become due if the property does not sell.
• The Auctioneer will explain how and when the Reserve Price is set. This is the minimum price at which the property can be sold at auction. The auctioneer will also explain the Price Guide (indication of the likely sale price) which is given to anyone interested in the property, and its relation to the Reserve Price.
• Written confirmation of the 'Terms of Business' will be issued by the auctioneer, which covers all aspects of the marketing of the property.
• You will then need to instruct your Solicitor and inform him/her that the auctioneer will make contact. Confirm with your solicitor your legal costs and when they will fall due for payment. The solicitor will then prepare a legal pack in conjunction with you including a contract, searches and sundry information which is available for inspection by prospective purchasers prior to auction.
• Once the marketing of the property has begun, the auctioneer will report any offers he/she receives prior to auction and any adjustments made to the Price Guide.
• You do not need to attend the auction, as the auctioneer can sign the contract on your behalf and complete the legal formalities.
• As with private treaty sales, you will need to vacate the property by the completion date unless the property has a tenant and it is being sold subject to tenancy

BUYING AT AUCTION:

• Obtain a copy of the auction particulars from the auctioneers. This may already contain certain key information.
• Make a thorough inspection of both the property and the neighbourhood. Don't be afraid to ask the auctioneer if you have any queries.
• Take your time considering the property and then, if you are still interested, ask the auctioneers to let you know if there is any possibility of the property being sold before the auction date.
• Make sure you know how much the deposit will be (usually 10% of the purchase price, payable at the end of the auction) and check carefully which method of payment is required so you can arrange for sufficient funds to be available.
• Take the property details to your Solicitors and ask them to advise you on the legal aspects of purchasing a property at auction. They will also need to see the legal pack to fully advise you, it is therefore wise to plan well in advance.
• You would be wise to obtain advice on the condition of the property as well as finding out any other relevant information, including planning and building regulations. If you are obtaining a mortgage or loan, then it will be advisable to have a valuation/survey carried out prior to auction to ensure that the property has no inherent defects and will be suitable for the level of borrowing proposed. Be careful to confirm the costs before authorising the report.
• Armed with all this advice, together with Terms and Conditions of any loan, decide on the maximum price you will pay for the property.

AT THE AUCTION

It is very important to arrive at the auction well before the advertised starting time. This is because any changes or additional information about the property will either be available in an "Addendum" or will be announced by the auctioneer immediately prior to the auction itself. Such alterations may have a bearing on your desire to buy the property.

• You can bid personally or someone else may be instructed, such as an agent or your Solicitor can bid on your behalf.
• Usually there will be a reserve price.
• If you are successful in your bid, you will need to sign the contract and pay the deposit immediately following the auction. At the fall of the auctioneer's gavel, you will be bound by the terms and conditions of the sale and usually liable for the insurance of the property from that moment. The date for completion when you will pay the balance of the purchase price and take possession of the property will be clearly stated in the conditions of sale and is usually announced by the auctioneer.
• If a property remains unsold, the auctioneer usually has authority to sell it privately in the room immediately after the sale, so it is sensible to register your interest at once even if a sale cannot be agreed straight away.

FOREWARNED IS FOREARMED

If you are considering buying a property at auction, it is worth reiterating some very important points:-

• Always make sure you are aware of all the information available on the property, by reading all written material available, asking the auctioneer prior to the auction and ensuring that you arrive at the auction in good time to hear of any last minute changes announced in the auctioneer's opening remarks.
• Equally, read through all the legal documents carefully, as these may vary from one property to another. It is advisable to take professional advice from a solicitor.
• Bid clearly. Generally the auctioneer will make it quite clear as to where the current bid is in the room.
• Make sure you are aware of the method of payment and amount of the deposit. There is often a minimum figure and it is not always set at 10%. Don't forget that you are bound to pay this at the moment the gavel comes down on your bid. Your liability for the property also starts from this point.

AND FINALLY . . .

Buying and selling property at auction is a straightforward and, in many ways, fairly painless method, but be on your guard. It is essential for both buyer and seller to take careful and detailed professional advice from Solicitors and Valuers. Go in with your eyes wide open, armed with all the information and advice available, and the whole process should go smoothly.

For more information, or a no obligation market appraisal for letting or to arrange an appointment to view any of the properties available please call our Holderness Road office on (01482) 375212, or e-mail:- info@leonards-hull.co.uk