Buying at Auction? Common Questions

Common Questions Asked When Buying At Auction

Why do I need a Land Information Memorandum?
A Land Information Memorandum contains the local council’s records about the property. You should check this and make sure you are happy with the details of the property.  If you want any other background reports, such as a registered valuation, title or trade report, these are also your responsibility.

How do I know what the property is worth?
Do your research before the auction. Visit similar properties in the area. Most buyers can establish an idea of a fair price by themselves by comparing the auction property to other properties on the market or recently sold. You can pay for a registered valuation if you wish. However if other people think the property is worth more money than your valuer does, then you may miss out.

What are the "Particulars and Conditions of Sale"
These are the terms and conditions of sale which are set out prior to the auction. They will include the chattels and expected Settlement date.  This document is available prior to auction and it would pay to have a solicitor look it over for you. Your solicitor should check the title for you as all bidders on auction day are deemed to have accepted the title.
 
Note any special conditions mentioned.  These conditions will be read aloud by the auctioneer at the beginning of the auction but you should an already familiarised yourself with them.

What is a Reserve Price?
This is the price below which the owner will not usually sell the property. The reserve price is usually known only by the auctioneer and the owners, and will not be made public. Once the reserve price is met, the auctioneer will announce that the property is “on the market” and it will be sold to the highest bidder.

If I want a longer settlement is this possible?
You can ask the agent for a variation of terms before the auction; for example you could ask for settlement in 90 days rather than the more standard 30 days. If the owner agrees to this variation, it will need to be in writing before the auction.

I can’t raise the full 10% deposit, does this mean I am unable to bid?
No, prior to the auction you can apply for a variation of the terms. This should be in writing and applies only to you.  Once this variation has been agreed to, you can then bid with confidence.

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