As we are currently in “Auction Season” with an estimated 1000 plus properties having been sold at auction from January this year what better time to prepare my Top Tips for Auctions:
- Be prepared – engage with your solicitor well in advance of the auction to review contract and title to any prospective properties. I recommend instructing your solicitor at least three weeks before the auction.
- Choose the right solicitor – Be wary of those solicitors offering the cheapest price as they don’t always provide the best service. Ask for recommendations from friends and family and only instruct a reputable firm.
- Confirm attendance – ensure your solicitor is available to attend the auction either with you or on your behalf.
- Be aware of “bargains” – many properties being sold at auction are distressed assets with their own issues. Ensure all legal documentation is furnished in advance of the auction so you can make a fully informed commercial decision.
- Planning – often properties sold at auction are sold without the benefit of General Condition 36 of the Law Society standard contract relating to planning. The responsibility to have planning matters investigated will then move from vendor to purchaser. Remember that if you are taking a mortgage over the property that the bank will have to be satisfied that all planning aspects of the property are in order. It is worth your money to have the planning history of the property investigated by an industry professional before the auction.
- Finances – If you are successful at auction you will be required to put down a 10% non-refundable deposit “there and then”. At this point in time you have exchanged contracts and are legally obliged to complete the purchase of the property. It is vital that you are in a position financially to fulfil your obligations under the contract. You should never buy at auction unless you are 100% certain that you have guaranteed funding from your lender or have the necessary funds if you are a cash buyer.
- “Add ons” – be aware of the additional funds you will need in order to complete the purchase of the property – solicitors fees, surveyors fees, architect fees etc – these all add up.
- Auction day – make sure to attend, bring your identification and your cheque book!
We are bang in the middle of auction season and there is no better insight into the health of the market than by watching the results coming out of the auction rooms around Ireland. While the make-up of catalogues is predominantly residential, it is encouraging to see the growth in the number of commercial properties being offered under the hammer.