What to do before the auction
Peter Hornor continues his look at the auction process and here at Brown & Co as we approach the December sale he focuses on some of the things that prospective purchasers are raising in the two weeks leading up to the auction.
Peter reports that there has been a great deal of interest, which is perhaps not surprising because of the confidence in the market.
Auctions always produce a number of different types of buyers with different objectives but all of them have questions, many of them simplistic but it should be noted that if there are any particular legal matters that need to be dealt with, solicitors should always be involved. This auction have been no different to any other.
Do we need separate advice?
We always recommend that anybody, whether they are a developer or a private individual, should seek separate advice probably at the outset from a surveyor who can inspect the property in their behalf and then from their solicitor who can look at the title and legal matters that relate to the property. There could be boundary issues and the surveyor could identify defects in the property that are relevant and affect what somebody ought to pay for the house or the individual lot.
We ourselves are not involved in the financial side of things but always recommend that prospective buyers look at the availability of finance early on if they are not cash buyers. Buyers should be aware that a contract is binding at the fall of the hammer and we have known prospective purchasers to arrive at an auction without arranging finance effectively, which is worrying.
Buyers should remember that they have to pay 10% of the purchase price at the fall of the hammer, with the balance payable usually after 28 days.
What about the reserve?
The reserve is set just prior to the auction and is private. The property will not be sold at a figure below the reserve price. A guide price is issued at the outset to give an indication of the potential value on the day of the sale.
What do I pay?
Again, you will need to form a view yourself or talk to your surveyor, who will give you advice and carry out the necessary research. An auctioneer's job is to get the best possible price on the day and much will depend upon the interest shown. A strategy needs to be formed prior to the sale so that you are not disappointed but do not go over what is considered to be a reasonable price by your adviser.
What happens on the day of the sale?
If you are determined to bid and keen to acquire a property you need to keep calm! You need to arrive early and remember to bring photographic identification and proof of address with you which is required under Money Laundering Regulations. Then find a nice seat somewhere in the auditorium with a view to buying the property when the times comes for your lot to be offered. When the sale proceeds there will be an opportunity for questions but if you are proposing to buy then you really need to have dealt with any queries you have well before the day of the sale.
What happens if I am successful?
If you are successful, the first thing you should probably do is go and have a drink, but not before you have signed the contract, paid the 10% deposit and dealt with insurance.
The auction process can be exciting but you need to be careful to be prepared and it does work for buyers and sellers alike.
Brown & Co are holding their auction on Friday 4th December at the Assembly House in Norwich.