Should you take a risk at a Property Auction?
Posted on 6th January 2020
Let’s face it we have all binged over Christmas watching daytime TV and stuffing our faces with chocolate! Well this Conveyancing Solicitor has in any case, and it was whilst this gluttony was taking place that I started watching Homes under the Hammer. A television programme that makes picking up a property at auction look like a breeze. Are auction properties always a bargain though? Here are our top five tips to help!
1. Research, research, research!
Make sure you know the area in which the property is located, is the property being sold at auction because the HS2 is going to be built in the back garden or because the living room floods on a daily basis? Check out the local area and amenities. Know your target audience; if you want to rent the property to a family have a look at the school league tables, if you don’t want to rent to students don’t buy a property next to a university. If you want professions who have no children and no pets, then you would be advised to buy inner- city. Target that which is familiar.
2. Get advice on the Legal Pack
A country cottage perfect to be renovated as a holiday home may appear like it is the bargain of the century but if it has a restriction which cannot be removed from the title or a restriction preventing any works being carried out then that bargain starts getting expensive quickly! Each property at Auction has its own Legal Pack seeking legal advice about the property and its Legal Pack before proceeding could prevent a costly mistake in the future.
3. Know your limits
Auctions can be exciting, and it is easy to get carried away. If you want to be successful at auction, then you must know when to walk away. Have a figure in your head that you can comfortably spend on your new property, and do not go over it.
4. The Legal Process
Either learn it or seek assistance from a local conveyancing Solicitor particularly if you require a mortgage! Not only do we summarise the title and advise of any pitfalls, anomalies and potential legal issues but we also explain how it all works in practice.
If you have an offer accepted on the open market, you have until the point of exchange of Contracts to raise your deposit, inspect the property by way of professional survey and are free to walk away without any financial consequence if any element does not work for you. At Auction once that gavel is down your bid is legally binding – you pay the 10% deposit to the Auctioneer, sign the Contract and have 28 days to finalise the deal. If you don’t have the cash by that point, you lose the deposit.
If you require a mortgage, have an Offer in Principle in place before you attend the Auction – and, remember, mortgage providers will only lend if the title is satisfactory
5. Appoint a property Solicitor who has your interests at heart
Whilst every Client is different, and everyone has individual needs most people share one common trait everyone wants someone acting for them who they can trust. There is little point instructing a “factory firm” where, when you call in, you deal with a different person – or, worst case scenario – you can never reach the conveyancer at all. Get someone qualified, with a direct dial / email, excellent client feedback and who will put you first. At MG Legal we are experienced Solicitors and Conveyancers who will take the time to listen to your concerns, explain the process and highlight any potential pitfalls.
MG Legal - Your Local Solicitors
Tagged as: Conveyancing Solicitors Lancaster, Preston Property Law, Property Solicitors in Preston, Your Local Solicitors
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