Siobhain Egan was brought up in Fulham, off the Kings Road, met “the one” – a north London boy who refused to move south – and so relocated to leafy NW1. Quickly she proceeded to fall in love with Camden and all its neighbouring areas, from King’s Cross to Kentish Town, Primrose Hill to Archway.
Now a director at Lewis Nedas Law, we’re delighted to present her monthly column talking about issues affecting those seeking to get on the property market.
Today: buying at auction
Photo: Amelia Horgan
For those devotees of the daytime telly show Homes Under The Hammer, it might seem that buying property at auction would seem to be a breeze. Er, I have news for you: not quite!
Sure, it’s possible to pick up a bargain (comparatively speaking) at auction, and it means that you avoid the usual stresses of a conveyancing chain. So it’s therefore a faster way of purchasing a property.
But before you begin, think about what it is you want to do with the pile. Buy it to let out? Live in it? Or do it up to sell quickly? The answer will determine the type of place you’ll be looking for, and the area you’ll be looking in. Here are eight points you mustn’t forget:
Remember that you will be competing with experienced property dealers so you’ll need to be highly organised and keep a very cool head.
Find out who the property auctioneers are that are dealing with the property and check them out. Have they been established for long; and are they a member of the relevant professional organisations?
Be realistic about the properties that come into auction. They are usually those that cannot sell in an open market (even this market!). They often need a great deal of work, so are probably probate sales or repossessions.
After identifying the property that you want, compare the open market value of similar properties in the area of your choice. Look at estate agents and online.
Try and visit the property as many times as you can, but bear in mind that you will have to act quickly; normally auction lists are published just two weeks before the auction.
You must now prepare to bid. Work out the ceiling of what you can afford and stick to that limit no matter what. It is easy to get carried away or become involved in a bidding war, for example.
Should you order a pre-auction structural survey? This requires careful consideration: these can be expensive and getting one organised within the two weeks before the auction is currently a feat in itself because of this very busy market. If you don’t have a survey then you’re going into that auction blind and could end up buying a money pit, or you could lose the auction and the cost of the survey.
Line up a specialist property solicitor, who is an expert in auction purchases. This is important because once you have successfully bid on the property you are legally contracted and have to complete the purchase of the property within 28 days.
Once you have won the auction, the auctioneers will require an IMMEDIATE deposit of 10%, so it’s vital that you have all your finances in place before you bid. Remember you have to complete the purchase within 28 days so you will not have time to look around for finance.
Other things to remember…
The auctioneers will hand you a legal pack after you have won the property which you must hand to your solicitors immediately so that they can complete all the necessary preliminary enquiries. This will contain copy title deeds, local authority/environmental searches, fixtures and fittings list, copy lease (if it is a leasehold premises), annual service charges/ground rent/sinking fund.
If the property fails to make its reserve price, speak to the auctioneers who may act as agents, and see if you can negotiate with the vendor.
Finally, good luck!
Auction purchases can be a good way to enter the market. Just keep your head.
This column is sponsored by Lewis Nedas, a firm of lawyers established in Camden Town for 31 years. Got a question for Siobhain? Head to their website here, email her directly at segan@lewisnedas.co.uk, or call 0207 387 2032. 