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Buying a Property at Auction: Key Legal Considerations
- Conducting Thorough Due Diligence
Properties listed at auction often have underlying legal or structural issues. Buyers must perform detailed due diligence before the auction date.
Tip: Obtain and scrutinize the auction legal pack through your solicitor, paying close attention to title deeds, any existing charges, planning permissions, searches and the management pack. The absence of documents may also be a cause for concern.
- Arranging Finances in Advance
Once your bid is accepted at auction, you are typically required to pay a deposit (usually 10%) immediately, with completion required within a short, fixed timeframe—often within 28 days.
Tip: Arrange your financing or mortgage approval before you place a bid, ensuring you can meet the completion deadline comfortably.
- Understanding Auction Conditions and Special Conditions
Auction conditions vary, and special conditions within the legal pack may impose obligations or liabilities on the buyer which may not be apparent from a brief read.
Tip: Carefully review all auction conditions and special conditions with your solicitor to avoid surprises or unexpected costs.
- Property Inspections and Surveys
Auction properties are usually sold “as seen,” meaning the seller is unlikely to address any defects post-auction.
Tip: Commission an independent building survey prior to the auction, helping identify any potential costly repairs or structural issues that could influence your budget on a particular property.
- Be Ready for Immediate Legal Commitment
When the hammer falls at an auction, the buyer immediately enters into a legally binding contract. Withdrawal or failure to complete may result in significant penalties, including the loss of your deposit.
Tip: Only bid if you are fully prepared and certain of your decision, having taken comprehensive advice beforehand.
Buying a property at auction can be highly rewarding, provided you approach it with careful planning and expert legal support. Our experienced team can guide you through each step of this unique buying process, ensuring a smooth and secure transaction.
For further assistance and advice on buying at auction, contact our conveyancing specialists today.
Rao Naeem-ul-Haque Khan
1 May 2025