29 September, 2017
We have all heard the stories of how people attend a property auction and bought a property for an unbelievably low price. The process can prove exciting and potentially profitable; however it is essential that you proceed with caution!
Once you have identified a property that you are interested in, contact the Auctioneers and arrange a viewing so that you understand what you are buying. It is essential to inspect the building yourself before the auction in case the catalogue forgot to mention the motorway flyover outside the top windows. As and when buying any property, it is advised that you make more than one viewing as you need to be aware of every facet of the property if you are considering bidding. Properties that fall under the hammer are often 'sold as seen' and with you warranting that you are buying the property subject to any defects. If it is an older property and needs a lot of work, it is worth investing in a structural survey to check for hidden problems, however it would be prudent to remember that time really is of the essence, so you have to act fast.
When you express an interest in a property, there is usually a legal pack available from the Auctioneers. It is very important that you digest this thoroughly, and if you are unsure about anything, have your solicitor check it out for awkward covenants or restrictions.
Due to the speed of the buying process at an auction, you need to ensure you have the money in place before the auction takes place. A successful bid is legally binding the moment the hammer drops and it is imperative that you have a ten percent deposit on the day of the auction, with the rest available within 28 days. If you require a mortgage, it is prudent that you have discussed all of the financial implications with the lender, and have arranged a mortgage in principle.
When the time comes for the actual auction, make sure you are prepared. It is a good idea to attend a few before becoming an active participant to watch other bidders and see how the process works.
Ultimately, whilst it can take time to do your homework prior to the auction, and it is admittedly pretty nerve-racking, there can be some real bargains to be had.
Forbes Solicitors has a team of experienced commercial property specialists who can assist with all aspects of buying, selling and leasing commercial property. For more information please contact the Commercial Property team on 0333 207 1130.