General Questions Answered Regarding Property Auctions

A guide price is a price given to all properties within an auction for the purpose of indicating the potential price in which the property in question could be sold for. It can come in the form of a fixed price or a price range (e.g. £100,000- £120,000). The guide price can be altered at any time before the actual auction takes place. It is, however, required for the most up-to-date guide price to be stated on the property details page at all times.

A legal pack is a set of legal documents related to a property prepared by the seller’s solicitor. They are available in both hard and soft copy formats. The hard copies are available on the day of the auction, whereas the soft copies are available on the related property details page on our website.

A legal pack includes – but is not limited to – the following:
• Official Copy of Register of Title (Office Copy Entry)
• Land Registry and Local Searches
• Special Conditions of Sale
• Property Information Form
• Fixtures and Fittings Form
• Management Information
• Leases
• Tenancy Agreements
• Planning Permission Documentation

Auction Agent recommends potential bidders to have all property legal packs assessed by their own legal advisors. There will always be vital information under the ‘special conditions of sale’ that may help bidders decipher whether the property in question is suitable for them or not.

Every property going through an auction must have a ‘reserve price’, it is a price agreed between the seller and auctioneer prior to the auction day. It indicates the minimum price that must be met on the day of the auction for a sale to successfully go through. The reserve price must not exceed 10% of a fixed guide price. Alternatively, it cannot exceed the higher end of a guide price range if the guide price is shown as a price range (e.g. £100,000- £120,000) rather than a fixed amount.

An addendum, also referred to as an amendment sheet, is a list of charges that have been amended post publication of the auction catalogue. It, therefore, forms part of the sales contract. This document will be made available on the day of the auction. The auctioneer will often remind bidders of any changes made as well.

An unconditional auction, often referred to as a traditional auction, is where properties are being auctioned and sold to the highest bidder, subject to the reserve price, upon the fall of the hammer. As soon as the hammer falls, the highest bidder would have entered a legally binding contract and would have 28 days to complete the purchase. It is required for the said bidder to pay a 10% non-refundable deposit and sign related paperwork immediately after the auction finishes.

Auction finance is similar to a regular property financing option but especially catered to properties bought through auctions due to the tight deadlines imposed. Auction Agent works closely with various financing suppliers to ensure that bidders can complete their purchases stress-free. Such finance companies have evolved throughout recent years, making financing easier, cheaper and more accessible to the wider general public. They have become very flexible in the types of properties that they provide financing for. Furthermore, they can often be confirmed within hours of application.

Such properties are withdrawn from the auction immediately after the auction. It is, however, possible for interested parties to submit an offer that is within the reserve price threshold and secure the property after the auction. It is also possible for interested parties to submit an offer below the reserve price, and have the auctioneer submit the offer to the seller for their consideration.

Auction results are generally available within a few days after the auction date. You may search on our Auction Results page, or alternatively, you may contact a member of our staff for assistance. Please note that properties that have failed to sell, or have been sold privately prior to the auction date, would not have the price disclosed.

This is a misconception and is false. Our auctions have a mix of both good quality/mortgageable properties, as well as properties which need works and other issues. They are generally in a wide range of property types, usage and value. It is the bidder’s responsibility to ensure that all checks, searches and investigations are done prior to the auction day.

Auction Agent covers residential, commercial and mixed-use properties across the North West. We also have land and other development projects to offer.

The open market value is an estimated amount calculated by a valuer that he/she believes constitutes as fair value. Such opinions are not always accurate and may differ from valuer to valuer.

An overage clause is a clause that specifies any increment on the sale price in the contract if certain conditions are met. Conditions come in different shapes and forms. An example would be a condition where planning permission is granted that may increase the value of the property/land.

What is the difference between selling through an auction and real estate agent? The most significant difference between the two channels is that an auction has a specific timeframe where the exchange and payment must be concluded. An auction will generally have contracts exchanged and payments made within 28 days. Sales through a real estate agent, however, may see a sale agreed quicker but, as there is no time limit requirement, may take months for contracts to be exchanged.

Another major difference would be the approach in pricing. Auctions will often market properties at a lower guide price to allow competitive bidding to determine the end result. Real estate agents will generally go the other direction, pricing properties at the highest price possible then slowly working it down until buyer interests are received. Going with either methods will, therefore, be determined by the seller’s circumstance and preference.

Exchange of contract is when the seller and buyer enters into a legally binding contract for the sale/purchase of the property in question. An auction, therefore, would have contracts exchanged immediately upon the fall of the gavel. Completion is when the property ownership is officially transferred from the seller to buyer. This happens when the transfer has been officially submitted to and confirmed by the Land Registry.

Our team are on hand to answer questions and you can call us on 01706 940499.

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