Buyers thinking about purchasing a property at auction are being offered advice on what they should look out for before bidding on a home.
NAVA Propertymark, the professional body for valuers and auctioneers, warned the entire process can be a drawn out and has the potential to be stressful.
So it has drawn up a list of things potential buyers should know before purchasing a property which is going under the hammer.
James Emson, president of NAVA Propertymark, said: “Although there are many things to consider when buying an item at auction, it’s a chance to have fun and it really doesn’t need to be complicated.
“If you do your homework, familiarise yourself with the lot you want, the terms and conditions that apply and are clear with your bids, you’re in with a great chance of success and maybe getting your hands on a bargain.”
There’s no backing out
If you are the highest bidder, once the hammer falls you must pay for the property. Many people mistakenly believe, because bidders often change their minds on auction websites such as eBay, that that they can do so in real life. However, this is not the case.
NAVA Propertymark warned if you pull out of an auction you could face huge costs or even be taken to court.
No refunds
If we buy an item online – either through a store or a marketplace – and we are not happy with it, we can return the product and may receive a refund. This is thanks to the Consumer Contracts Regulations.
Things are a little different when buying at auction, however. This is because, before the auction, you can view the item in advance and choose whether or not to bid, so you will not be protected by the law, even if you bid via a live webcast.
Check the small print
Reading the terms and conditions of the auction house you are using is essential, NAVA Propertymark said. By entering into a bid you are agreeing to these terms so it’s important you are familiar with them.
When buying a property you must pay a deposit and any administration charges immediately. The balance and the purchase price must usually be paid within 20 business days. Getting to grips with what needs to be paid and when will ensure you don’t face any unexpected costs.
Watch out for Buyer’s Premium – an amount to pay over and above the hammer price – and VAT, which might be applicable.
Reserve price
A reserve price is figure below which the lot cannot be sold. It is usually set by the seller with the auctioneer. The auction guide or estimate must not be placed below a fixed reserve as this would mislead bidders.
Is your auctioneer regulated?
When you are making such a huge purchase, it’s important to ensure you choose a regulated auctioneer. A NAVA Propertymark Protected auctioneer would have to be a qualified professional with high standards so look out for this endorsement. This will guarantee any money you pay will be held in a dedicated auction client account to protect both you and the seller.
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