How to buy a property at auction. Part 2: Preparing to make your bid
Published 18th April 2022
In part two of our guide on buying a property at auction, we provide advice on the next stage of the auction buying process. From getting your conveyancing sorted, to the ways you can take part in the auction itself.
If you missed part one of our guide, take a look back as this covers everything you need to get you started, from navigating through the terminology, to the various types of professional advice you require.
Get your auction property conveyancing sorted!
So, you've seen the property you want to bid for, but be mindful! The key difference between buying a property at auction versus a standard property purchase is that as soon as the hammer falls there is no going back. You are in a legally binding contract, and you will be required to pay a non-refundable deposit even if any problems come to light that were hidden in the small print in the conditions of sale.
When getting a conveyancing quote, it's important to state it is for an auction property as the process for the conveyancer will be different and will affect costs. Investigate if a conveyancer can provide a pre-auction report. This will usually involve checking the auction legal pack, the conditions of sale, and looking for legal issues that could cause problems. For example, limitations on the use of the property or missing title deeds.
Q: Can I make a pre-auction offer?
Once you have the conveyancing for your auction purchase in place you are in stronger position to get bidding. Most auction houses allow for pre-auction offers and they can be a good way to secure a property in advance. A pre-auction offer needs to be enticing and above the guide price to make it attractive as auctions are designed to create competition to get a better price. Ensure you have checked the legal documentation and viewed the property, so you know what you are bidding for and can decide a limit to avoid over-bidding.
Q: Will the lot always be available on the day?
There is a risk that a property can be withdrawn from sale before the auction, so it's a good idea to keep a check with the auction house that the lot is still available. Register your interest in a particular property and the auction house will let you know if that property is withdrawn or sold before the scheduled date.
Q: How can I bid at an auction?
Feeling the buzz of a busy auction room is an iconic part of the process but being able to bid remotely is becoming increasingly popular, particularly with the changing world post-pandemic. Telephone bidding, internet bidding, and proxy bidding are all ways of taking part without having to be in attendance.
Q: What details do I need to provide to take part in the auction?
Whether you are bidding in person or remotely, you will need to register your details with the Auctioneer. You will need to provide them with your name, address, and the name of your conveyancer/legal representative. You will also need to provide proof of your identity so they can ensure that you are who you say you are. You will be required to provide photographic ID, proof of address, and a recent utility bill or bank statement.
The same rules apply if you are bidding remotely but this needs to be done in advance of the auction. You can usually download a form on the Auctioneer's property details page, together with the terms and conditions for bidding this way. Arrangements will need to be set up prior to auction day, with your information provided, ID verification completed, documents signed, and funds made available for the purchase deposit should your bid be successful.
Once the registration process is complete, a unique Bidding Number is issued that is used to identify you when making a bid during the auction.
So, now you know what you need to do to be ready to bid, you're nearly there! Look out for part three of our 'How to Buy a Property at Auction' guide coming soon with tips on how to make a successful bid and what happens when you win the property!