Large-scale property auctions are more popular now than ever. We are still going through the meltdown and from the Celtic Tiger years.If you are buying at an auction the most important advice is check it out in advance with your solicitor and engineer. Then make a decision – rather than being bitten by auction fever and make a decision you will regret. Remember if you don’t prepare you could buy a problem that might be very expensive to fix in the long term.
Frequently the properties offered for sale have difficulties such as a structural defects, missing title documents or boundary issues.
Similarly sellers don’t know of any disputes with neighbours over boundaries of any other issues. They will not be able to tell you how the property is supplied with water, sewerage, electricity or telephone and TV services.
The sellers are usually receivers or banks who have possession of properties want to move them on. The sellers have no personal knowledge of the property and cannot give the information you would normally expect to receive from a regular vendor. The receiver will not know whether there is any divorce or separation in the background or of any other claims against the property. There could be creditors who have judgements registered against the property. This is where your solicitor’s advice will be vital.
There will be no warranty about whether the property complies with planning permission. If there are any extensions or alterations to the property you would be well advised to have them checked out by an engineer or architect before making any bids
Check it out
It is impossible to emphasise enough the importance of checking this kind of property out before bidding. You will have a very limited time to do this and the pressure will be on.The auctioneers can send title documents and contracts by email to your solicitor . This Is a very efficient process and helps speed things up.The most important thing to do in the circumstances is to have the property checked out by an engineer and a solicitor to see what the problems are in advance. If there is a real obstacle you could back out of it before you ever bid. If you buy a problem you will be stuck with it.
At the Auction
When you go to the auction make sure that you have enough money to pay the deposit. If you are a successful bidder you will be asked to come up and sign the contract and pay the deposit immediately. Your deposit will then be at risk. You should be in a position to provide the rest of the purchase price, normally 90%, to close the sale within a few weeks.
Frequently the closing date will be three or four weeks from the date of the auction and you may be under severe pressure to provide the money.
Once the contract has been signed and you have paid a deposit the purchase will proceed like an ordinary conveyance although there is usually much more time pressure to complete.
If you are borrowing to buy it is unlikely that your bank will give you carte blanche to go and buy a property without having it checked out and inserting conditions. Do not presume that mortgage finance will be available. Check it out before hand.