Properties can be purchased by way of a privately negotiated transaction or at a public auction. The advantages of purchasing by way of public auction are certainty and transparency. The purchaser will see first-hand the bids made for the property being sold, and the sale will be to the highest bidder. The disadvantages are that an enforceable contract comes into existence when the auctioneer’s hammer falls, which means that the successful bidder is bound to purchase the property and so must be fully satisfied by then that title is in order and that finance is in place to complete the purchase.
For these reasons, it is essential that a person wishing to purchase at auction instruct a solicitor well in advance so that the title to the property can be fully investigated. Further, it is usually wise to instruct a surveyor to check all physical aspects of the property, such as boundaries and access, and to confirm that matters are in order as regards planning permission, and building regulations, if applicable.
Auctions may be conducted in person or online. If online, the auctioneer will usually prepare a booklet containing all relevant title and other documents for the property, all of which must be checked carefully in advance. Some auctioneers will require bidders to register prior to the auction and may require a lodgement of a specified amount to their account.
Where auctions are carried out in person, the potential purchasers can bid themselves or may instruct an agent to do so. It is essential not only to have the property thoroughly checked out and to have finance in place but also to have a budget to include a provision for payment on the auction date of 10% of the purchase price. By having a budget, potential purchasers will not get carried away in the heat of the moment and overextend themselves in bidding. It is essential to bear in mind that the successful purchaser at auction will be asked to sign an unconditional contract for sale and pay a 10% non-refundable deposit on the day.
Following a successful auction bid and signature of contracts, the closing of the sale will usually take place a few weeks later. The successful bidder will have to have the balance of the purchase money over and above the 10% deposit available on closing. This money will be paid over by the purchaser’s solicitor to the vendor’s solicitor in return for ownership and possession of the property on the closing date.
Staunton Caulfield & Co. are experienced in dealing with all types of property transactions, including purchase by auction, both in person and online. If, therefore, you are considering a purchase at auction, please feel free to contact us well in advance of the auction date, and we will give you detailed advice on all relevant aspects of the proposed transaction.
We will guide you through the process to make it as stress-free and successful as possible. We will also advise you on all additional costs and outlays involved in a successful purchase, such as solicitors’ fees, surveyors’ fees, search fees, Stamp Duty and Property Registration Authority fees.