Considering buying property at auction?

If you are hoping to buy a property at auction for the first time, you may think that you won’t need the services of a solicitor until you have had a bid accepted and are ready to start the conveyancing process. Your initial focus will, understandably, be on looking at the property, discussing its potential with an architect, builder or other contacts, and then making sure that you have access to the funds you need.

However, there are several things that you should ensure you check from a legal perspective before starting to bid on any auction property, and a residential property lawyer will be able to help with these.

Check the title

1. Is the seller also the registered owner of the property? For instance, if the sale is a back-to-back transaction for them, they may only just be being registered as the owners and this can lead to difficulties for the new buyer when trying to obtain a mortgage.
2. Are there any restrictions on the title which could result in you needing specific consents from others before being able to register the property in your name?
3. Have planning permission and building regulations been complied with when any work has been carried out on the property?
4. Are there any issues which might prevent lenders from agreeing to a mortgage? For example, are there any defective leases?
5. Do you know what you are looking for when you study the searches in the auction pack? For instance, not everyone would spot that a foul sewer under a property could cause potential future issues.

Timing

Are you sure that with the help of your solicitors, and your funders if you need them, you will be able to meet the completion deadline? Not doing so is likely to lead to either interest being payable under the notice to complete, loss of your deposit, or the cost of extending completion date.

What we can do before an auction

1. Review the pack and alert you to any potential issues.
2. Report to you on the title and confirm whether there is anything in it which is likely to give a mortgage lender cause for concern.
3. Point out any indemnity policies which may be required.
4. Point out any likely future issues if you wish to re-sell the property.  If you are a cash buyer, you may not be concerned whether you can get a mortgage on the property but will need to think about whether you will be able to sell in the future to someone who needs a mortgage.
5. Advise you on the amount of Stamp Duty Land Tax which will be due, depending on the eventual purchase price of the auction property.

Discover more about Adele Satur

Auction packs are usually available several weeks before the auction takes place.  It is advisable to get one as early as possible to give yourself, and your lawyer, adequate time to identify any potential pitfalls.  This will enable you to go to the auction properly prepared and with a realistic idea of what price will represent value for money in relation to your chosen property.

How To Contact Us:

To contact a member of our team, you can fill in our online enquiry form, email info@fraserdawbarns.com, or call your nearest office below. If you’d like to speak to a member of our team at one of our offices across Norfolk and Cambridgeshire, visit our offices page.

Wisbech: 01945 461456

March: 01354 602880

King’s Lynn: 01553 666600

Ely: 01353 383483
Downham Market: 01366 383171

This article aims to supply general information, but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek advice specific to your own circumstances. Fraser Dawbarns LLP is always happy to provide such advice.