Buying property at auction can be an attractive way of getting on the property ladder or making an investment. It can save you a good amount of money, you can move quickly, and it’s reliable as the commitment is made when the hammer comes down.
However, there are some risks to buying at auction. Being aware of the risks and how to avoid or prepare for them can reduce the risk to you and your purchase, though.
What Are the Risks?
There are several risks that could come with from an auction property, either with the property itself or not preparing for the auction beforehand. These include:
- Lack of title deeds or defects in the title
- The seller not being the registered proprietor
- Limitations on the use of the property and other important covenants
- Local land charges affecting the property
- Lack of planning permissions and building regulations certificates
- Lack of necessary legal rights
- Absent landlord
- Unusual lease provisions
- A lease with less than 80 years to run
- Additional expenses payable on exchange or completion
These are more technical risks and go alongside arguably the biggest risk at auction – that you might be outbid and not get the property.
But, taking care and getting expert advice can help you to avoid purchasing a property that causes problems further down the line.
How Can You Avoid These Risks?
You can avoid many of these risks, or at least prepare for them, with advice from a conveyancer before the auction.
Before the auction, you should be given a legal pack. A conveyancer can review the legal pack to highlight issues such as those above.
With expert advice, you can go to auction fully aware of any issues with the property.
It is understandable if you are reluctant spending money prior to auction, not knowing whether you will win the bid. However, you should consider the cost of these risks further down the line. Is it better to spend a little now to save a lot more money and trouble later on?
If you need help with legal advice before an auction, please give us a call on 01925 351 350.
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Chris Rudd Solicitors
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