Q: I am thinking of buying a property at auction. Is there anything in particular that should do to prepare for the auction?
A: There are three key considerations when you are thinking of buying a property at auction; having the auction pack checked by a solicitor, having a survey and making sure funding is in place.
It is important to obtain a copy of the auction pack from the Auctioneer and ask a solicitor to check it prior to the auction. Your solicitor will be able to provide valuable advice about any potential problems with the legal title or within the searches. They will also be able to advise you about your obligations under the contract should your bid be successful.
Also consider having a survey done before purchasing at auction. This may be money wasted if you are not successful but it could also be money well spent if it reveals problems which mean you are either deterred from buying or the survey indicates that it is worth less than you originally thought. It is not uncommon for properties to be placed in an auction for a quick sale because they have a legal title defect or physical problem so beware and seriously consider instructing a solicitor and a surveyor to make checks beforehand.
The final point to consider is funding. As soon as your bid is accepted at auction you are contractually bound to complete the purchase, this is usually within 28 days. Ideally, you should be a cash purchaser but if you are intending to obtain a mortgage then you should at least have a decision in principle from a lender. Relying on being able to arrange funding after the auction is risky and you could lose your deposit if you cannot obtain the balance of the funds in time.
For further information contact Caroline Williams a solicitor in our commercial property department.