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Property Auction - Buyers Questions Answered

Is registration prior to the auction a prerequisite to attend the auction?

You do not need to register before the auction day. You my simply just turn up on the day of the auction and register upon entry.

Can I still bid if I am unable to attend the auction?

Yes, you may opt to bid by proxy or telephone. It, however, requires you to fill in an application for
us to make necessary arrangements prior to the auction day. Certain auctions may facilitate online
bidding as well. Both telephone and online bidding works well but would be subject to connection
strength. We, therefore, cannot guarantee that the connection will not be lost and consequently
cost you your bid.

Can I buy at an auction as a first-time buyer?

Yes, you most certainly can. In fact, many first-time buyers are starting to purchase in auctions in
recent times due to its tremendous value. It is, however, advisable that such buyers to properly
research the ins and outs of auctions and have financing prepared beforehand, if necessary.

What happens when I win a bid?

A member of staff at the auction will escort you to the contracts desk, where you will then be asked
to provide personal information such as proof of ID/residency, NI number, addresses used in the
past 3 years etc. This is part of the preliminary checks for anti-money laundering (AML). Upon
completion of the AML checks, you will then be asked to make payments for administrative fees,
deposits and other charges that may be applicable. You will be asked to sign the memorandum of
sales, where you will then be able to keep a copy for your solicitor. Finally, our team will contact you
in writing to confirm your purchase and notify your solicitor accordingly to finalise the purchase.

What identification proof would I be required to provide in the event of winning an auction?

Winning bidders will be required to supply ID and residential proof upon winning an auction in order
to comply with HMRC’s anti-money laundering regulations. The following are acceptable forms of
proof:
Identification Proof
– Valid passport
– EU member state identify card
– Valid photo driving license
– Armed forces ID
– Firearms or shotgun certificate
Residential Proof

– Utility bill/statement dated within the past 3 months
– Mortgage statement from a recognised lender dated within the past 3 months
– Bank, building society or credit union statement dated within the past 3 months
– Local council or housing association rent card
– Valid photo UK/EU driver’s license
Bidders opting to bid by proxy, telephone or online will be required to submit their ID and residential
proof prior to the auction day for their bids to be accepted.

What is a Buyer’s Premium?

A buyer’s premium is a fee that is payable by any winning bidder to the auctioneer at the time of
exchange. This is payable on top of other charges like administration fees.

What is an Administration Fee?

An administration fee is an additional charge, on top of other fees, payable by any winning bidder to
the auctioneer at the time of exchange. The amount is typically a fixed fee but may also be a
percentage of the sale price (subject to a minimum amount). All payment details will be made
available alongside property details.

Can I bid online?

It is possible to bid online if the specific auction offers it. Not all auctions, unfortunately, will offer
this service. Bidders should be aware that there may be difficulties in bidding during the auction due
to connectivity issues. Most bidders usually opt for proxy or telephone to avoid this. Please speak to
a member of staff to get further information.

Can offers be accepted before the auction day?

Yes, it is possible to submit pre-auction offers. It should be noted, however, that not all sellers would
permit this and, therefore, should be confirmed on a case by case basis.

Do I need to book an appointment to attend an open house viewing?

No, it is not required to book an appointment, unless stated otherwise alongside the property
details. Please check the property details for times and dates of the open house viewing. You may
approach a member of staff to get further information if you have any enquiries regarding a
property.

How can I get a copy of the Legal Pack?

All legal packs are made available on our website alongside the property details in question. You may
also opt to contact a member of staff if you have difficulties downloading it.

How do I bid at an auction?

There are typically four different methods of bidding: in-person, by-proxy, telephone and online. The
most common way to bid would be in-person. Simply listen to the auctioneer clearly for the lot
numbers being auctioned and raise your hands to get the attention of the auctioneer to submit your
bid. You may opt to bring someone else or ask a member of staff for help if you have issues bidding
yourself.

How much is the deposit?

The deposit to secure a purchase is typically 10% of the sales price agreed, unless otherwise stated
on the property details. Such deposit should be paid from a bank account in the name of the winning
bidder. It is possible to have a separate company or individual to make the payment on behalf of the
buyer, however the auctioneer will require their identification verified due to anti-money laundering
regulations.

Is it possible to buy a property under a company name?

Yes, it is possible. There are, however, further information and documentation required when a
bidder opts to do this. The following are the information/documents required:
– Letter of authority under the company letterhead signed by the director(s)
– Company registration number and registered address
– Personal ID/residential proof of bidder
– Personal ID/residential proof of any major shareholders of the company (with 25% or more
shares)
You should speak to a member of our staff if you are intending to purchase a property with an
overseascompany, in order to confirm the additional documentation required.

How do I view a property?

Properties being auctioned typically have open house viewing dates and times available within the
property details page. Some properties do not require any key access; interested bidders may,
therefore, view the properties at their own risk. There are, occasionally, properties being offered
without the option to have internal viewings, of which may be specified by the seller. It is, therefore,
advisable for interested parties to consult a member of our staff if the open house viewing dates are
not made available on the property details page.

Can non-cash buyers buy from the auction?

Yes, many bidders opt to obtain finance from various financial institutions for their auctions. We,
however, require at least the deposit and other fees to be paid as a minimum at the point of
contract exchange. The balance payable may be arranged through finance, if you so choose to. You
will need to ensure that your finance provider would be able to meet the deadline of 28 days to supply you the finance. You may speak to a member of our staff if you have any concerns or
questions regarding this process.

What additional fees do I need to pay?

There may be additional fees on top of the administration charges and buyer’s premium. This may
include reimbursement of the cost of searches and any other additional charges entailed in Special
Conditions of Sale, of which can be found in the legal pack.

What are disbursements?

Disbursements are all additional charges that are payable by the purchaser on completion. These
costs may include – but not limited to – cost of searches, legal fees, additional
documentations/supplements etc. All disbursement charges can be found within the Special
Condition of Sale of the Legal Pack. It is advisable for all interested parties to consult and seek legal
advice from their solicitors.

What is a telephone/proxy bid?

Telephone and proxy bids are two ways in which you can bid in an auction without physically
attending the auction itself.
Telephone Bidding: A member of staff will contact you by telephone at the start of the auction. We
will inform you of the lots being auctioned as well as all competing bids. We will then bid on your
behalf according to your instructions. It is advisable for all telephone bidders to inform us of their
highest bids for each property in case of the event of connectivity loss.
Proxy Bidding: This form of bidding is where the bidder advises us in writing their maximum bids for
each lot. A member of staff will then bid on their behalf in the auction. We will try to our best ability
to secure lots below their maximum bid. Your proxy bid will end as soon as the auction exceeds their
maximum bid.
Bidders will need to fill in a form, obtainable on our website or office, if they so wish to bid in either
case. Background checks, funds and documents should be arranged prior to the auction day to
ensure that your bids are successful.

What are the acceptable payment methods?

Only funds that are cleared can be processed at the auction. This includes bank transfer, banker’s
draft and debit or credit card. Cash will not be accepted in any circumstance due to anti-money
laundering regulations.

What is an open house viewing?

An open house viewing allows any interested parties to inspect and assess properties prior to the
auction. They are typically available for viewing 3 weeks or more prior to the auction day. This
should give enough time for bidders to make an informed decision. They may also approach a
member of our staff to obtain further information regarding the property.

Why should I buy from an auction?

The biggest reasons why one should purchase through an auction rather than a real estate agent is
due to its speed, certainty and value.

It is stipulated in the sales contract that all transfers should be completed
within 28 days of the auction. This is significantly faster when compared to a real estate agency,
where it may potentially take months to complete.
Certainty is also a huge factor because, as soon as the gavel falls, the seller is contractually obliged to
sell to the highest bidder, subject to the reserve amount. No time is therefore wasted going back
and forth between the two parties.
Finally, auctions are often seen as the best way to purchase a property in terms of value. Auctions
work from the low end and work their way up to the highest bidder. Real estate agents, on the other
hand, work from the higher end and eventually work their way down until a buyer is interested. It is,
therefore, logical to believe that properties bought in auctions are cheaper than through real estate
agents.

When can I move in?

You may move in as soon as the entire sales process is complete. This is typically as soon as the
property transfer is officially registered with the Land Registry. The auctioneer will be informed by
the seller’s solicitor to release the keys to the buyer as soon as all legal paperwork is finalised.

Do I need to have a survey done for all properties I am interested in buying?

It is not compulsory to get surveys done for all properties you are purchasing. It is, however,
advisable for interested parties to seek advice from surveyors, builders or civil engineers if there are
any concerns on the structure of the building. It is crucial to have all concerns clarified and
addressed prior to the auction day as the sale contract is legally binding upon the fall of the gavel.
You may approach a member of our staff if you have any queries or concerns so that we may advise
you further.

When do I need to pay the remainder of the money after paying the deposit?

It is typically stipulated in the sales contract that buyers have 28 days to exchange the contract and
pay the balance money owed. Sales contracts may vary; it is, therefore, advisable to have your
solicitor read the contract thoroughly in case the timeframe is shorter or longer than normal.

How much should I make my banker’s draft out for?

We generally advise bidders to make a banker’s draft for 10% of their highest bid. Bidders will also
need to find other methods to pay for other charges levied on the purchase, such as the buyer’s
premium and administration charges etc.

How do I know whether a property is mortgageable or not?

Bidders should always check whether the properties they are interested in are mortgageable or not
if they are looking to seek finance for them. The following is generally a list of issues that suggests a
property is not mortgageable:
– No kitchen or bathroom
– Structural defect, damp, dry or wet rot
– Properties within the vicinity of mining works, landfills and recent areas of flooding and
subsidence
– Leasehold properties with typically less than 70 years on the lease, and or a defective lease
agreement
– Properties with boundary disputes or where planning permissions were not applied properly
– Properties in a very poor condition or those that require demolishing
– Non-standard properties: properties that are not constructed like a typical property in the
UK. A standard property consists of brick/stone walls and slate/tile roofs
– Properties that have a value below a certain threshold set by banks

What happens if I do not complete a purchase?

The buyer will typically lose their deposit and any other charges they have paid to secure the
purchase. There may also be other penalties payable, of which can be advised by your solicitor.
Please discuss this with your solicitor or a member of our staff if you find yourself in this situation.

When do I pay the deposit?

You will be asked to pay the deposit of 10%, unless otherwise stipulated, in addition to other fees
payable to the auctioneer, upon the fall of the gavel.

Who usually buys in auctions?

Traditionally, auctioneers sell exclusively to traders, cash investors, builders and developers; it was
rare to have private buyers attend auctions. Time has changed, though. It is evident that auctions
have become more mainstream, where one will see investors from all walks of life attending
auctions and making bids. First time buyers, buy to rent investors, buyers requiring finance and
others are rushing to auctions after hearing and/or experiencing themselves issues with purchasing
through real estate agents.

Do I need a solicitor before the auction?

It is generally advisable for bidders to consult legal advice from their solicitors before buying at an
auction. Legal packs may be overwhelming, especially for new bidders. You will eventually need your
own solicitor upon successful bidding of a property.

Do I need to insure the property immediately after the auction?

We often advise successful buyers to insure their properties upon exchange of contracts. It is also a
good idea to check the legal pack to see whether the seller will continue to insure the property or
not. You may contact a member of our staff or speak to your solicitor to confirm this.

When do I start receiving rent if I have purchased a tenanted property?

Rents are payable to you upon completion of transfer in the Land Registry. You should, however,
liaise with your solicitor and the existing tenant to have a rental payment system in place prior to
this date.

What is Due Diligence?

Due diligence is when one does everything within their power to do research on and confirm
something. This phrase is, therefore, thrown around a lot in the property trade as there are a lot of
background checks to be confirmed before one makes a purchase.

Can I make offers for any unsold properties in auctions?

Yes, it is possible to make offers after an auction ends for any unsold properties. We, however,
advise interested parties to contact a member of staff as quickly as possible as there would be a
substantial amount of people making offers as well. The auctioneer acts on a first-come-first-serve
basis on whichever bid is within the reserve price range or if the seller accepts the offer.

Can I change my mind after making a successful bid?

Contracts are legally binding upon the fall of the gavel. We, therefore, advise you to not bid hastily if
you are not 100% sure about a property. It is technically possible for you to change your mind; you,
however, will be breaching the sales contract. You will, consequently, suffer heavy financial
penalties.

Do I have to get my solicitor to check every legal pack of properties that I am interested in bidding for?

It is not compulsory for you to get legal packs checked. It is, however, advisable to get them checked
if you are new to the bidding process or to the property industry.

Is it possible to accidentally bid on a property in the auction?

No, it is not possible. This is because the auctioneer will make eye contact to confirm every bid. You
should, therefore, not be worried about this issue.

Our team are on hand to answer your questions. You can call us on 01706 940499 or click here to email us.

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