Auction Conveyancing Solicitors
Buying a property at auction is fast-paced, exciting, and full of risk. Unlike a standard purchase, there is no time to carry out due diligence after your bid is accepted; you are legally bound to buy the property the moment the hammer falls. This makes a specialist auction conveyancing solicitor your most crucial asset.
The Auction Conveyancing Process: Step-by-Step
The auction conveyancing process is condensed compared to a standard property purchase. Here's a typical step-by-step guide, but it's paramount that you instruct your solicitor well in advance because the turnaround is so short for an auction:
- 1
Seller lists the property & prepares the legal pack
The seller instructs an auction house and their own auction property solicitors to prepare an auction legal pack. This pack contains all the essential documents related to the property's legal standing.
- 2
Buyer identifies the property & instructs their solicitor
The buyer chooses a property they're interested in and instructs a specialist auction conveyancing solicitor to review the legal pack. This review is important for due diligence.
- 3
Auction Legal Pack Review
Typically available 2-5 days before the auction, the legal pack is reviewed by the solicitor. While not mandatory, this expert review is highly recommended to uncover any issues before bidding.
- 4
Auction Day: Bid & Exchange Contracts
If the buyer wins the bid, the hammer falls, and they immediately become contractually bound to buy the property. On the day, the buyer pays a 10% deposit and signs the contract. There is no cooling-off period.
- 5
Post-Auction Conveyancing & Completion
The buyer's solicitor handles completion, which must take place within the set timeframe (normally 21 to 56 days) after the auction. This involves transferring the remaining funds, registering ownership, and dealing with any post-auction formalities.
Unlike with standard conveyancing, where you can take as much time as you like before you confirm you are happy to exchange contracts, an auction property is legally binding at the point the hammer comes down.
The buyer has to pay auction fees, a 10% deposit and complete the purchase in 21 to 56 days (the normal agreed time frame, specified in the contract).
Why is a solicitor's pre-auction review so important?
The moment the hammer falls, you are legally committed to the purchase. There's no turning back, no time for further checks, and your deposit (usually 10% of the purchase price) is immediately at risk if you can't complete.
A pre-auction legal pack review by an experienced auction property solicitor is designed to save you from a catastrophic financial loss. They will examine the legal documents to uncover any issues that could make the property un-mortgageable, unsellable, or more expensive than anticipated. This due diligence allows you to:
- Identify restrictive covenants, easements, or planning issues that could affect your use or future sale of the property.
- Flag missing information - Auction legal packs can sometimes be incomplete, especially for repossessed properties. Your solicitor will highlight any missing documents that could indicate underlying problems.
- Clarify any unusual or onerous conditions of sale that might be buried in the contract, ensuring you know exactly what you're committing to.
- Determine if the property has any legal defects (e.g., a short lease on a flat) that would prevent a standard mortgage lender from providing finance.
- Bid with confidence - Armed with a clear, professional report on the property's legal standing, you can set your maximum bid with full knowledge of potential liabilities, avoiding emotional overbidding.
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Freehold Pre-Auction Report Review
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£299 INC VAT
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Leasehold Pre-Auction Report Review
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£480 INC VAT
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What are the different types of property auctions?
Traditional Auction (Unconditional)
This is what most people picture. It's often held in a physical auction room or live online. The moment the hammer falls, the sale is legally binding, and you exchange contracts immediately.
You pay a 10% deposit on the day and typically have 21 to 28 days to complete the purchase. This method demands speed and readiness.
Modern Method of Auction (Conditional)
This is an online-only auction with a longer bidding period, often several weeks. If you're the winning bidder, you pay a non-refundable reservation fee (not a deposit) and enter into an exclusivity agreement.
This gives you 28 days to exchange contracts and then a further 28 days to complete (totalling 56 days). This longer timeframe can make it more suitable for those requiring a standard mortgage. A prominent provider in this space is I Am Sold.
How to finance an auction property purchase
Cash
The fastest and lowest-risk option for auction purchases. Buyers often use personal savings or company loans to complete quickly, with a view to refinancing post-completion or selling after renovations.
Bridging Finance
A popular short-term loan solution designed specifically to bridge the gap between auction purchase and long-term finance.
You can raise bridging finance on the auction property or another asset. Ideal for meeting tight auction deadlines.
Standard Mortgage
This is the riskiest option due to the short completion deadlines (21-56 days). It's often challenging to get a standard mortgage approved and funds released in time.
Furthermore, many auction properties are un-mortgageable in their current condition due to structural issues, lack of planning permission, or short leases.
What are the risks of buying at auction?
When buying at auction, there are no guarantees. If you buy at auction, you do so caveat emptor (literally 'let the buyer beware'), which means that if there's something wrong with the property, you probably won’t have any comeback against the seller or the auctioneers. This is why the pre-auction legal pack review is so critical.
You never truly know why a property is being sold at auction. Was it that the seller needed a fast sale? Does the property have a structural defect that can't be fixed? Is the lease short, and the freeholder won't extend? Is the council looking to enforce the removal of an extension with no planning permission?
The challenge is that if there is an issue post-auction, you could be buying a property that can't be sold on the open market, or your mortgage lender won't lend you the money because of the issue.
This exposes you to losing your 10% deposit and the seller's legal costs. You might have a remedy if there were misrepresentations in the auction catalogue or legal pack; however, this is a complicated area of law and you'll need a specialist property auction solicitor.
How much does an auction legal pack review cost?
Auction TitleChecker | Legal Pack Review Cost | Post-Auction Conveyancing |
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Auction TitleChecker Short on time? Get a report that inspects the property title today.
£66 INC VAT | Legal Pack Review Cost 2 days or more? Get a solicitor to inspect the legal pack.
£299 INC VAT £480 INC VAT | Post-Auction Conveyancing Winning bid? We can get you through to completion quickly.
From £995 INC VAT |
Investing in a pre-auction legal pack review is a small price to pay for the peace of mind and protection it offers against potentially catastrophic financial losses.
The auction conveyancing cost for a legal pack review is significantly lower than the full conveyancing fees for a property purchase.
Our specialist auction conveyancing solicitors offer fixed-fee legal pack reviews. This means you know the exact cost upfront, with no hidden surprises, allowing you to budget effectively before you even bid.
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
