House Buying Process

Question 1

Buying at auction - when a winning bid is accepted:

Answer 1

10% non-refundable deposit must be paid

Contracts are exchanged on day of auction

Buyers must have finance in place - either CASH or MORTGAGE ALREADY AGREED

Question 2

To exchange contracts on day of auction - buyer will need to:

Answer 2

have survey completed
have completed mortgage application & obtained an agreement
have any preliminary legal work completed before the auction

Question 3

Common now for the vendor’s solicitor to have prepared a legal pack for prospective bidders to inspect before the auction which will typically include:

Answer 3

• A memorandum of sale
• Special conditions of sale
• Local Search
• Land Registry Search
• Proof Of Title
• A copy of any lease that affects the property

Question 4

Modern Method of Auction

Answer 4

Conditional online auction

Each property has a deadline, by which bids must be made and bidders can track activity

With a successful bid, the bidder pays a non-refundable reservation fee of up to 5% of the purchase price to secure the property

The buyer then has 28 days to exchange and a further 28 days to complete

If the buyer withdraws prior to exchange, only the reservation fee is lost (up to 5%)

Defects or issues identified after exchange of contracts will not release the buyer from their obligations - unless they are a result of deception or problems with the title of the property

Question 5

Issues with auctions

Answer 5

Substantial outlay on the valuation and legal fees with no guarantee of success

Property may require remedial work and lender may impose a retention

10% deposit must be available on auction day and is non-refundable

Once bid accepted - no backing out