buying at auction

If you find a field that is available through a public auction there are advantages to buying this way though you need to be especially prepared.  This is because that when the gavel goes down on your bid you have entered into a contract and you have to buy.   That can put others off and perhaps gives an opportunity to buy a bargain.

If you are going to an auction you will need to be sure that you have the financing in place.  Ideally you should have a bank account with the money in it but specifically you will need the 10% deposit in your account and a chequebook with you to the auction.

Either before the auction or at the auction you will need to read the background legal papers.  These will usually include a copy of the proof of title (a copy of the land registry entry), replies to standard pre-contract enquiries which the vendor will have answered, and a local search which is the local authority's view on anything relevant to the land.  You can, of course get your solicitor or conveyancer to look at these before the auction and many auctioneers provide a "buyers pack" (some will charge you for this - about £20 or £30 is typical). 

When you look at the paperwork you should spot any difficult issues relating to access, problems with the title, planning designations, nearby road changes, and any designations (such as SSSI status).

At the auction itself you might want to make sure you get there in good time so that you don't have to hurry through the paperwork.  You will want to think where you sit - being at the side near the front gives you a view of what is happening in the auction room and makes sure that the auctioneer won't miss you when you bid.  There are two philosophies (at least!) on how to bid - should you bid early and "make the running" or should you come in for a late and successful bid?  This is really a matter of personal taste but you will probably want other bidders to see that you are serious but not so determined that the auctioneer can make you jump in larger increases than you want.  To slow down the bidding you can sometimes offer less than the auctoineer wants - if the auctioneer asks for an increase of £1,000 you can try offering £250 or £500.  Most auctioneers will take your bid if there aren't hundreds of lots still to sell and if the bidders are obviously nearing the limit of what they will bid up to.

If yours is the highest bid when the auctioneer bangs down his/her gavel you are the successful buyer - the property has been "knocked down to you".  You will usually be expected to go to the front of the room and sign a contract (you will be given a copy) and fill in your solicitor or conveyancer's details and hand over a cheque for 10% of the full purchase price.  When you eventually settle the bill for completion - within 28 days after the auction is fairly standard - you may be expected to pay the costs of the local authority search.  This can add about £200 to the cost.  You will not, however, usually have to pay stamp duty as this does not apply for purchases below £150,000.  You may also want to check with the auctioneer what the arrangements are for access and any hand-over details (keys, water, stock, crops).

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