Preparing to Purchase at Auction
When purchasing at auction you are essentially completely committing yourself to purchasing the property in question. If you are the successful buyer you have to sign unconditional contracts and pay the relevant non-refundable deposit immediately after the auction. The seller then signs the contract and both you and the seller are totally committed to the sale of the property.Once you have found your chosen property you need to arrange the following prior to the actual auction day-
It is always recommended that you get a qualified architect/surveyor to inspect the property.
Arrange loan approval through your chosen mortgage intermediary/financial institution (They may also require a separate survey/valuation of the property).
Your solicitor needs to check the Conditions of Sale for the property and other legal documentation associated with your proposed purchase. The Conditions of Sale are available from the seller's solicitor. The conditions also include information such as the completion date of the transaction, any contents that may be included in the sale etc.
You are required to pay a deposit on the day of the auction, which is normally 10% of the purchase price. Generally speaking a cheque is acceptable for this purpose, however, many people choose to bring a bank draft.
Properties can be purchased prior to auction. As a general rule, agents will only sell a property prior to auction if a purchaser decides to make an offer that the agent feels may be difficult to achieve on the day of the auction.
AUCTION DAY
When a purchaser has carried out all their preliminary work they are ready to attend the auction. Here are some useful tips:
Arrive at least 10 minutes early so that you can get a good position in the auction room. If possible you should try and get a seat to the rear of the room so that you can see your competition.
If the property does not have a lot of interest in it, and it looks like it is going to be withdrawn, it is very important that you are the highest bidder at the time and that the property is withdrawn to you. If the property is being withdrawn it essentially means that the seller is not prepared to sell it at that price level.
In that circumstance you will have sole and exclusive rights until you cease negotiation or leave the auctioneer's offices to negotiate with the agent to purchase the property. It is always in your interest to purchase the property there and then, as what tends to happen is, as time goes on, other interested parties can enter the equation and a Dutch auction may ensue.
A Dutch auction is where two or more people bid against each other for a property that is outside of an auction environment.
Before the auctioneer is prepared to actually sell the property under the gavel he/she has to announce that the property is on the market. In many circumstances the auctioneer has to leave the auction room to take instructions from the client and receive permission to put the property on the market. Once the property is announced as being on the market there is no turning back for the seller, and if there are no further bids the auctioneer must sell the property at that price.
There are no hard and fast rules about bidding: you will have to develop your own style during the auction.
One good tip is to visit the auction of another property prior to going to the auction of your chosen property. That way, you can see how things work and will be better prepared for your own auction.