A Guide to Selling Property at Auctions
Selling at Auction can give a transparent sale, within a short period of time, achieving the best possible price.
Once the hammer comes down, the purchaser enters into a binding contract, and pays a 10% deposit on the night of the auction and will sign a contract, prepared by the seller’s solicitor.
Completion usually will occur within 28 days, although this can be extended or shortened if required, provided that buyers are made aware.
Once the contract is signed there is no risk to the vendor of adverse surveys or down valuations. The successful bidder is legally obliged to complete the sale.
Kendall Head (Auctioneer and Loveitts Director) along with Sally Smith (Loveitts Auction Manager and Associate Director) will arrange at a mutually convenient time to visit the property to appraise not only its suitability but its potential sale price, Guide price, and to run through the Auction process.
Once instructions to proceed have been received, brief sale particulars are prepared, and forwarded to the Vendor for approval.
An Energy Performance Certificate (EPC) is required by Law for properties that are put on the market. The EPC must be ordered before marketing can commence, and must be in place 7 days after the first day of marketing. Due to a condensed marketing period it is imperative that the EPC is ordered immediately. Loveitts are able to advise you on the cost of applying for a EPC.
The seller will need to instruct a solicitor to prepare a Contract Pack. This is the legal documentation that are required to be in place for a potential purchaser to view before the Auction, and the documents that will be signed by the purchaser on the night of the Auction. Ideally the Contract Pack will be ready 2 weeks prior to the auction.
It is essential when choosing a solicitor that consideration is given to using a Loveitts nominated Solicitor. The solicitor is an essential part of the process to ensure that any potential purchasers have all the information that they need to consider their purchase in plenty of time before the Auction. Loveitts can provide a list of local independent solicitors that sellers in the past have used and found to be both speedy and efficient.
Potential purchasers may want to view the property during the marketing period and have a survey carried out. Loveitts will arrange all viewings and a representative will always be in attendance.
Potential purchasers will also want to see the Contract Pack in plenty of time before the auction. Special Conditions of Sale, title documents, lease details (where applicable), searches, planning documentation and office copy entries will all be contained within the legal pack. Once the Legal Pack has been received by Loveitts it will be uploaded onto our web site so that purchasers can download the information freely.
A few days before the Auction the Reserve price will be agreed with the seller. This is the level below which the property cannot be sold. It is important that this be set at a realistic level.
During the marketing process, Loveitts will monitor all viewing levels and feedback, reporting regularly back to the seller. It may be that offers are received to purchase prior to the auction, and advice will be given, where required, as to how to proceed.
On the Day of the Auction
Our Auctions are held at the Village Urban Resort, in Coventry, during the evening.
It is all quite simple. The Auctioneer offers the Lot and takes the bidding up to the highest level. The fall of the hammer represents an exchange of contracts and the successful bidder is legally obliged to pay a 10% deposit and sign the contract before leaving the room. The property is purchased ‘as seen’, and cannot be renegotiated after the Auction.
Some sellers wish to attend the auction and some don’t, there is no obligation to attend. For those sellers that don’t wish to attend, a telephone call will be made after the auction to advise of the outcome.
After the Auction
Loveitts will deal with monies held, and legal matters after the auction. It is always advisable for sellers to check with their own solicitor after the auction, if there is anything outstanding in readiness for completion.
It is advisable for the seller to read the meters within the property and forward all keys to the property to Loveitts the week before completion.
Completion will then occur 28 days after the auction (unless otherwise specified), when the balance of the monies is paid. Loveitts will arrange with the purchaser on the day of the completion to collect keys from their office.
What happens if the Property does not sell on the day?
If the property fails to meets its reserve on the night of the Auction, there may be someone who still wishes to buy. It is then up to the Vendor whether an offer is accepted. There is still the opportunity in the days immediately after the Auction to agree a sale and exchange contracts under Auction conditions. This can occur only with the co-operation of the vendors solicitor.
The property may also be sold in the days or weeks after the Auction.
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