Guide to Buying at Auction

How and why should I buy at auction?

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Buying at auction is an assured way of securing a purchase. Once a bid is accepted, contracts will be exchanged on the day of the sale. The seller cannot withdraw from the sale, nor is it possible for any kind of guzumping to take place. Due to auctions being conducted in public, there can be no secret bidding or unfair competition and once the gavel comes down, the successful bidder is legally committed to both pay the agreed price and complete the purchase. Another attraction of buying at auction, is that properties are usually offered at a realistic guide price, particularly when in need of repair, refurbishment or being sold by a financial organisation to recover debts. 

The seller will provide a legal pack that may be inspected at any time. Details of the seller’s solicitors will be available and, should a mortgage be required, it is advisable to have this in place prior to the sale. Stags always advise that funding is discussed with a professional advisor prior to attending the sale. The successful buyer will usually be required to pay 10% of the purchase price on the day. The balance of the purchase price is required on the agreedcompletion day and this is normally 28 days after the auction.

Obtain legal advice

A legal pack is requested from the vendor’s solicitors and this contains copies of all legal papers, which will be required by any prospective purchasers for them to make an informed decision regarding the purchase of any lot. The pack will include special conditions of sale, title deeds and plans, the relevant local authority search, leases (if applicable), replies to pre-contract enquiries and any other relevant documents. All legal packs are available for inspection prior to each auction and on the auction day. Any purchase at auction takes place under the assumption that all documentation and the terms of the contract have been read and understood. It is strongly recommended that any potential purchasers carry out full investigations for any lot in which they have an interest – a survey, if required, is an integral part of that investigation.

Arrange finance

Should a mortgage be required, approval in principle must be obtained prior to auction. Lenders are now familiar with the auction process and are usually willing to provide a mortgage offer for buyers intending to purchase at auction. A valuation and survey will be required along with legal evidence that there are no issues that will affect the value. It is essential that the lender can provide funds within the timescale for completion. On the day of the auction, the purchaser will need to pay 10% of the purchase price and must ensure there are cleared funds to pay this amount. 

Can lots be bought before auction?

Vendors may consider offers submitted before auction day. Any such offers need to be submitted to Stags – this will be referred to the vendor and their instructions will be passed on to the prospective purchaser. Any offers will have to be unconditional and the buyer must be in a position to exchange contracts and pay the required deposit before auction day. The lot will not be withdrawn from the auction until you have exchanged contracts. 

What do I need to bring with me on the day?

A cheque book for any potential purchase, with at least one cheque for each lot.

Identification – this is legally required under the money laundering regulations. Therefore a driving license or passport is required and a current utility bill to show proof of residence.

Details of solicitors acting on your behalf.

Administration fees

Unlike most firms of auctioneers, Stags do not charge a property administration fee to purchasers.

What happend on the auction day?

No registration is necessary, however, please do check the day before the auction that any required lots are still available and the order of sale. Early arrival at the auction is recommended to ensure the Auctioneer’s announcements are noted regarding withdrawn lots and any changes to the lots. The Auctioneer will make pre-auction announcements regarding the conduct at auction. Please note questions will not be taken by the auctioneer from the floor once the auction is in progress. Any questions or queries should be dealt with prior to the lot being offered. The Auctioneer will start the bidding by invitation and will invite bids at a particular level. You can make bids by raising your hand or catalogue. All bidders in the room will have an equal opportunity to bid and the auction team will be available for support. Once the desired price is reached, and the final bid made, the Auctioneer will announce that the gavel is about to fall and the property will be deemed sold. At the fall of the hammer a legally binding contract has been executed. Contracts are then exchanged and the successful purchaser will be invited to the front to pay the 10% deposit and to sign the sales memorandum, at the end of the auction. If you are the successful bidder you are legally obliged to complete the sale.

Reserve

All lots will be offered for sale to an undisclosed reserve price (unless stated otherwise)

What happens if I am unable to attend the auction?

If prospective purchasers are unable to attend the sale, it is possible to bid in other ways:

By telephone – the prospective buyer will be called by a member of the Stags team as the lot is being auctioned and they will take their bids over the phone.

By proxy in writing – a member of the Stags team will represent the prospective buyer, who has previously specified their maximum bid.

In each case a registration form and cheque to cover the deposit are required prior to the date of the auction. You can download a “Proxy/Telephone Bidding Form” from our website or call the relevant office for more details.

What if your lot is not sold?

If the lot you are interested in is unsold you should register your interest with the auctioneers at the end of the auction. 

Definition of Guide and Reserve

Guide Price(s) are an indication of the sellers expectation.

Reserve Price(s) are a figure below which the auctioneer cannot sell the Lot at auction. We expect the Reserve will be set within the Guide Price range.

Guide Prices may change at any time prior to the auction.