Are you considering selling or buying property at auction?

If you are a seller and haven’t decided which method of sale to use there are some tips for you in this note. There are also some tips for buyers.

Properties that may be particularly suited to auction sale are varied:

– unusual properties that are difficult to value
– properties that require a lot of renovation
– properties being sold after repossession
– tenanted properties
– properties requiring planning permission for a proposed use
poorer quality property

An auctioneer will be able to advise you on the suitability of your property for auction sale.

Advantages of selling at auction include:

– there is no need to negotiate with a buyer
– when the hammer falls the buyer has to complete on the date stated in the contract
– some properties might achieve a higher price than sale by private tender.

Disadvantages of selling at auction include:

– you will have to pay the auctioneer a fee even if the property doesn’t sell
– auctioneers may charge commission at rates as high as estate agents.

Tips when selling:

– speak to the auctioneer in plenty of time as there may be special considerations to factor in such as consent from a landlord for the sale of a leasehold property
– give your legal pack to the auctioneer in plenty of time for the catalogue and website.

Tips for buyers:

– check that the auction catalogue include all of the conditions of sale – it is unlikely as there may be as many a three sets of interlocking conditions (the legal pack is likely include special conditions not included in the catalogue)
– check that the legal pack contain everything you need including search results
– consider inspecting the property and/or getting a valuation
– consider whether or not you need a mortgage
– check whether or not the contract requires you to insure the property from the date of the auction and if not doe the seller have to continue to insure it until completion
– consider whether the transaction could be a transfer of a going concern which would require you to register for VAT.

If you are a buyer our property specialists are expert in reviewing legal packs quickly to pick out potential problems so don’t rule out asking for advice even if you think you have left it too late.

by Andrew Carrier from the King’s Lynn office