On The Day Of The Property Auction
What is bidding by proxy?
On the day of the property auction, bidding by proxy is where you ask the auctioneer to bid on your behalf. To do this, you'll need to give the auctioneer written instruction as to what your maximum bid is, and also furnish him with a check for 1% of that maximum amount. The auctioneer will then bid for your property on your behalf during the auction. He will also try and secure the property for lowest amount of money subject to it being above the reserve, so that you end up being the successful bidder.
What should I do when I arrive at the auction?
When you arrive at the auction, I do suggest you get there prior to the auction starting, before any of the lots are offered, you need to make sure you get ahold of the adenda. This is a piece of paper, or several pieces of paper, with any last minute changes which relate to the individual lots being offered. Look to see whether the lot you're interested in is on there and make sure you understand the changes to the lot, which are mentioned on the adenda. These could be the details in the catalogue are incorrect, the lease details are incorrect or maybe the property is now vacant when it was going to be tenanted. It's absolutely essential you know what's on there relating to your property because it will form part of the auction contract, and just because you did not read it is not a reason for getting out of a contract if you bought a property.
What do I need to take to the auction on the day?
If you're planning to bid at auction, there's several things you need to take to auction on that day. Firstly, you need to take at least two forms of identification. To find out what is acceptable, have a look in the front of the catalog, as it will be listed there. Secondly, don't forget to take your solicitor's contact details. These will be entered on the memorandum of sale, if you're the successful purchaser, so that the contract of sale can be sent out to him. Thirdly, you need to take a 1% deposit. In most cases, a personal check will suffice. However, certain lots, and they will be listed in the special commissions of sale, will require you to either take a bank draft, a solicitor's check or a building society check. Remember, if you're giving a personal check, this will be special, and it is essential to make sure you've got funds to meet it the next day, as it will be clearing on that day.
Why do I need to keep a copy of the auction catalogue?
It is absolutley imperative to keep a copy of the auction catalogue. This forms part of the contract of sale. In the catalogue, there is the description of the property and you want to make sure, as you should have done prior to bidding, that the property that you're buying matches that description. Bear in mind though, that the catalogue also takes subject to the addenda that was given after the beginning of the sale, and any alterations to its descriptions in that would take precedence over the catalogue. So do keep both and you'll be safe.
At what point in the bidding is a deal legally binding?
The contract becomes legally binding when the hammer falls on the highest bid. Remember, the hammer will only fall if the bidding has gone above or has reached the reserve price. The fall of the hammer constitutes an exchange of contracts, which is the same as your solicitor exchanging contracts in the normal course of buying a property through estate agents.
What do I need to pay on the day, and how?
If you are the successful bidder, then a few minutes after the hammer has fallen on your lot you'll need to pay the deposit. This is normally 10 %. Payment of deposit can normally be by personal check, though check the special conditions of sale to see whether a banker's draft or solicitor's check was required. Remember, if you're paying by personal check, the check will be specialed, so ensure that there are funds in the bank to meet the check when it comes in the following day.
How long will completion take after the auction?
Completion for lots is normally 28 days after the date of the auction. But again, you must check the special conditions of sales to see whether the vendor has asked for completion to take place in either a shorter or longer period of time. This is especially important if you haven't got all your finances in place. Because if it is shorter space of time, you may not be able to complete in time.
Can I still buy a property that hasn't met its reserve at auction?
On the day of the property auction, about 24% of all properties offered at the auction do not sell in the room on the day. These properties can be purchased after the auction by simply contacting the auctioneer, or seeing him on the day of the sale. He will tell you at what price the property can be purchased, normally the reserve. If you do agree with the reserve price, you will simply sign the memorandum of contract and exchange contracts for the property there and then.
