In This Guide
Apply for a mortgage
Buying at auction
1. Introduction
2. Pre-auction preparation
3. On auction day
4. Bidding tips
Buying in Scotland
Conveyancing
Find and view
Negotiate
Plan your purchase
Success and failure
Surveys and valuations
To buy or not to buy
Buying at auction
On auction day
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Before you turn up, phone the auction house to make sure that the property you are interested in bidding for is still going to be offered for sale. Though it is rare for new lots to join an auction at the last minute, it is not so rare for them to be withdrawn. It is also a good idea to check that there have not been any alterations to the start time, as that would be really annoying.
Get there early. This will allow you to get acclimatised and to hear the auctioneer's opening announcements. It also gives you time to speak to a member of staff if you have any queries or needs any further information or assistance.
Late additions to the catalogue are usually provided on loose paper, which you can pick up on entry to the auction room along with an amendments sheet that highlights any other changes to the information previously published.
As a potential buyer, you must register your interest at the beginning of the auction and provide various details to the auction house. You may be given a small placard with a number on it, which you can wave frantically at the auctioneer when you want to make a bid, otherwise you will just have to use your hand, arm, leg or anything else that can shown a definite buying signal.
The auctioneer will explain the rules of battle before you engage the enemy. You should listen carefully to what he says and keep an ear open for additional supplementary information about the property you are intending to bid for.
Each property will usually have a reserve price. This is the price below which the vendor will not normally be willing to sell. From the seller's point of view, the bidding will hopefully take the sale price well above the reserve and everyone goes home happy. However if the reserve price is not met, then the lot is withdrawn from the sale. Even if this happens, there is nothing to stop you contacting the vendor and trying to negotiate on the price.
If the reserve price is met, then the vendor is legally bound to complete the sale according to the terms set out in the conditions of the auction, which usually means signing the contracts immediately after the auction finishes.
If you are successful, then the auctioneer's clerk will want to get various details from you, such as your address and contact information and that of your solicitor. You are also likely to be asked for proof of identity, so make sure that you take some with you.
You will have to pay a 10% deposit immediately after the bidding closes. You should find out before you go what sort of payment terms the auction house will accept. Some (but not many) will accept a personal cheque. It is more common for them to accept a bankers draft or building society cheque, which you can get from your bank or building society (assuming you have enough money in an account there). The amount on the cheque should be for 10% of your ceiling price. If you manage to buy the property for less than this then the auctioneer will refund you the difference.
Once this has been paid and your details provided, you will be asked to sign the auction Memorandum. In return you will be give a document on behalf of the vendor, which you should entrust to your solicitor at the earliest opportunity. This is your contract.
The balance of payments will usually need to be transferred within twenty-eight days of the auction, so there is no hanging around. To be able to do this without going completely mad, you need to be organised and prepared, otherwise you'll find that you are biting your fingernails all the way up to your wrist.
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