Guide to Buying and Selling Property at Auction Property in demand at Pearsons Auctions: Properties in need of repair • Investment opportunities • Tenanted homes • Commercial premises • Defective titled property including short leases • Probate sales • Bankruptcy/repossession • Land with or without planning • Vacant properties
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Buying at Auction The main advantage for the buyer is the transparency as you are bidding in an open forum and can see who else is bidding. The fall of the gavel affects an exchange of binding contracts so the sellers cannot change their mind or increase the agreed price. Before you bid: 1. Check the condition of the property with a surveyor. You must satisfy yourself on the condition of the property. This is normally done by asking a surveyor to inspect the property and report to you.
2. Check the legal title to the property with a solicitor or conveyancer. The legal ownership is not a simple matter and so, again, you must be certain that there are no surprises in relation to the title. Here you should take professional legal advice. Normally there will be an “Auction Legal Pack” available from the auctioneer and this will include searches, copy of the title documents or a copy of the Land Registry Entry and any other relevant information including details of guarantees, building regulation approvals, planning consents etc. This must all be checked before the day. Pearsons Auctions are conducted in accordance with the RICS Common Auction Conditions which form part of the contract you will be making with the seller. There will also be Special Conditions specific to each property and these are different in each case. They can also amend the Common Conditions in material ways so they must be read and understood. These and the notices in the catalogue form part of the contract too.
3. Check you have the money to pay a 10% (or minimum £3,000) and the Buyers Fee on the day and the balance of the price on the completion date. You must know you can pay for the property before you bid. In the Conditions there will be a date for completion normally set for 20 business days after the auction to which you will be committed. On the day of the auction you will be required to pay a deposit on the property you have bought, this is normally 10% of the purchase price, subject to a minimum £3,000 deposit. This can be paid either by Bank Transfer (bacs), which is the preferred method, by cheque or bankers draft from an approved financial institution. We are unable to accept cash or credit card payments and we must comply with current money laundering regulations so there are further procedures and restrictions you need to adhere to.
4. Read and understand the notices and conditions contained within the catalogue. There is an Important Notice to Buyers printed in the catalogue which you must read and understand. You will in addition be required to pay a Buyers Fee.
5. Before attending, check with Pearsons that the property is not sold prior to the auction.
Selling at Auction Is my property suitable for auction? A buyer at auction will exchange contracts and pay a deposit on the day, with a completion date already set, usually within 28 days. Whatever your property is, you must be willing to commit to a sale and complete the transaction with this time-frame in mind. All property types are suitable for auction, but something with potential to refurbish or extend proves to be particularly well sought after. As long as you can offer vacant possession, then buyers in the auction room will bid against each other to secure such an opportunity. As a seller you avoid complicated chains, mortgages and buyers changing their mind and instead have the reassurance of an immediate exchange of contracts and a fixed completion date.
How does it work? If you’re considering auction, arrange an appointment with the auction department or contact your local office to have your property appraised. We will advise you on the likely selling price and give you details of all the costs involved and a copy of our Terms of Business. Once you have decided to go ahead you can confirm your instructions by signing the Terms of Business and paying the Entry Fee (see our Terms of Business for details). We will market your property and the auction itself in the local press and online as soon as we receive your confirmed instructions. Viewings will be arranged and accompanied and we will keep you updated with offers and level of interest. If extra advertising is required, such as national press or specialist magazines, we are happy to obtain quotes and arrange this at an additional cost (this is not included in our fee). You will need to instruct your solicitor or legal representative to carry out the necessary searches and other work including preparation of the Special Conditions of Sale. The auction contract is prepared in-house by the auction department and signed on successful purchase
of the sale. All properties for sale will require an Energy Performance Certificate which can be arranged by ourselves. Before the auction, a provisional Reserve Price is agreed and kept confidential between ourselves. This is the figure the bidding must reach as a minimum for the property to be sold. The Guide Price is the published price and used as a figure to generate interest without being misleading. The final Reserve Price will be agreed with yourself immediately before the auction. Neither figure can be changed unless mutually agreed and confirmed in writing.
Offers and bids It is common for offers to be made before the auction. However, the advantage of selling on the day is that the hammer falls for the highest price offered which equals or exceeds the reserve price. There is a legally binding contract with a completion date and a deposit paid. Bids can also be made by telephone on the day and by proxy (when a buyer confidentially instructs another or us to bid on their behalf).
Duty of Care A Public Auction is a proven method of sale and demonstrates that the seller has obtained the best sale price possible on the day. So, if you have an obligation to do this, such as a trustee or an executor for an estate, then an auction is ideal.
Other information It an offence to make any potentially misleading or false statements about the property, so we will provide you and your legal advisers with our draft sales details and catalogue entry before publishing so that you can check it is accurate. All information provided by you or on your behalf will be accepted as correct and you hereby indemnify us for any resulting liability if any such information is found to be incorrect. We must also have an Energy Performance Certificate arranged (if applicable), before marketing starts. Money Laundering Regulations mean we need proof of identity and address before acting for you - usually a driving licence or passport and a utility bill or council tax bill addressed to you at your address (less than 3 months old). If you have instructed another estate agent to offer your property in the recent past, please check you are free of any obligation under your agreement with them before instructing Pearsons
to act for you. There are circumstances where a seller could be liable for two agent’s fees. The successful bidder will pay a Documentation Charge to us on exchange of contracts. It is important that you inform us if your property is registered for VAT. When a deposit is taken at exchange of contracts this will be held by us. The money is paid into Pearsons client account and on completion will be forwarded, less any deduction of our agreed fees, to your legal advisers, with a detailed statement and receipt for any deductions. There is no interest payable on money held by Pearsons. Should your property not sell at auction we will contact all likely buyers and if an acceptable offer is forthcoming we will sign and exchange contracts on your behalf. We will not accept any offer below the reserve without your express and written instructions.
Pearsons Auctions deal with any property related opportunity within Hampshire that can be sold by public auction. Established for over 100 years, Pearsons are a trusted name in Hampshire with a network of established residential sales offices to assist with marketing. We hold regular auctions in West End, Southampton (just off junction 7 of the M27) at the Ageas Bowl Cricket Ground. Contact Auctioneer Steve Sprake or Auction Manager Gary Juryeff. 023 8047 4274 auctions@pearsons.com pearsonsauctions.com 62 High Street, West End, Southampton, SO30 3DT
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