You have found your dream home, and have discovered that it will be sold at auction. Alternatively, you think you might be able to find a bargain through the bidding process. Either way, it pays to know what to expect when buying a home through an auction house.

Catalogue

The first step you should take is to ask for a catalogue from the auction house. The catalogue will detail key information such as the date and venue the auction will be taking place, details of the properties location, and a description of the property. It will also give information regarding viewing the property and solicitors.

A good guide will also give you information relating to the conditions under which the sale will be taking place, forms for proxy or telephone bidders, a copy of the sales memorandum, and provide notes to help guide potential buyers.

Price

A guide book will always give potential buyers a guide price. It is important to remember that this is in no way fixed, and may vary widely even before the day of action, so check with the auctioneers office before the auction for the most recent guide price before the day of the auction. Even on the day of the auction, it is important to be aware that the property may sell for significantly more or less than the guide price.

The seller of the property may well insist of a reserve price for their property, and in many cases at auction a reserve price is put on properties. Unlike the guide price, this price will not be disclosed to potential buyers. If the reserve price is not met at the auction, then the property will not be sold, even to the highest bidder, as this constitutes the minimum price of the property.

Viewing

Viewings for properties that will be sold at auction will generally be carries out on a block viewing basis. This gives you the chance to have a good look around your potential property, but it also gives you the opportunity to take a professional with you so that you may gain a more thorough assessment of the properties condition. I

t is important to do this as the auction house will not comment on the condition of a property or offer any warranty for it. If you are satisfied with the property and still keen to go to auction, you should then ask the auction house for a copy of the legal pack. This pack will also contain details of the conditions of the sale.

At this stage, you will need to involve your solicitor so that they may review the pack and advise you accordingly. Your solicitor should also review the addendum before going to auction, as it contains vital further information regarding the property and the sale and is updated continuously. The addendum should be reviewed just before going to auction so that you are fully informed of any potential factors that may influence your decision to go ahead and bid at the auction.

Financing

Ideally, you should have funding in place before the day of the auction as many properties sold at auction with a 28 day timescale to complete the purchase, and your financier may not be able to achieve this deadline if you have not already got your finances in order. Alternatively, your lender may value your property at a lower price that you have bid at the auction, leaving you to pay the difference.

You will need to pay a 10% deposit on the day of the auction, and there may be further charges to pay, which will have been detailed in the legal pack. Either way, it is important to factor in these costs before the day of the auction, so that you may budget accordingly.

So, you have seen the property, and happy with the legal documents and the latest addendum, you are aware of the guide price, and you are confident of your funding. You are aware that if you win the auction, you will be exchanging contracts at the auction house immediately after the auction, and will be expected to pay your 10% deposit on the spot. Great! Now you can go ahead and place your bid by proxy, be at the end of the telephone line, or take a seat in the auction house, ready to bid for your dream home.