On The Day Of The Property Auction
How do I bid at an auction if I'm attending in person?
Bidding at an auction if attending in person is very simple. Having made sure you're bidding on the correct lot, all you need to do when the auctioneer invites bids is simply raise your hand or catalog and he will acknowledge you and take your bid from you. When he has a bid from somebody else, he will then come back to you and see if you want to bid again. If you want the auctioneer to go up in smaller increments, simply call out the size of the increment you want, or give out an indication. For example, "...", that means you want to half the increment he's going up with. It's the auctioneer who will decide whether he's going to accept it or not, and he is under no obligation to accept your request. In any event, if you are not happy to bid any further and you have reached your limit, simply shake your head like that, and he will not take any more bids from you. At the very end, just before he knocks the property down, he will probably come back to you to see whether you want to come back into the bidding fray, and he also has a couple of spotters, one on each side of him, looking for people who want to bid. So, the chances of not being involved in the bidding are very remote, if you do in fact want to bid.
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.
How can I bid if I can't attend the auction in person?
If you are unable to attend the auction in person, there's three main ways of bidding. Firstly, you could do it by proxy. Here, you give the auctioneer written instructions to what your maximum bid is, and to deposit a check for ten percent of that amount and he will bid on your behalf as if you were in the room. Secondly, you can bid over the internet. Many of the auctions held are now viewable over the internet and you can interact with the room by placing bids by ticking a box. In this method you'll need to register with the auction house and furnish them with a ten percent deposit check as well. The best way of bidding though, I believe, if you're unable to attend the room is simply over the telephone. One of the auction staff will call you on the phone just before the lot comes up for sale and invite you to bid. He'll be your mouthpiece in the room. The benefit, of course, is that you'll be able to listen to the auction happening, decide on whether there's other people bidding against you, and hopefully reduce the increments that the lot goes up in to skewer the property at the best possible price for you. I believe it is the best way to bid if you are not able to attend in person though nothing beats being in the room itself.
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.
