If you are considering selling your property, you may wish to consider selling it through an auction opposed to the conventional method of selling, particularly if you have an unusual or imperfect property for sale. Selling at auction can be a faster route and can also provide more certainty as once the property is sold by the auctioneer, the successful bidder is legally bound to proceed and a binding contract is in place.
Considerations when selling at auction
The following discussions and actions are important to complete with the auctioneer before selling your property at auction:
- Whether there are any costs associated by selling through the auction house, for example any advertising costs. Ensure you read the small print as these may be payable even if your property fails to sell on the day.
- Confirm the guide and reserve prices. The reserve price is the minimum price you are willing to accept for the property, which isn’t seen by the buyer.
- You may receive offers on the property prior to the auction which can be discussed with the auctioneer as to whether you wish to accept those or proceed to see if you can receive a higher price at auction.
- Ensure your property is ready for any viewings before the auction.
An auction pack is required to pass to prospective buyers so that they can review the details before making a potential offer. Generally, the auction pack will include:
- Form of transfer deed
- Search results – unlike a standard sale, it is your responsibility as the seller at an auction to pay for and carry out searches on the property. The cost would then be reimbursed by the successful buyer when, and if, the property sells
- The Title Register, Plan and copies of any historical Deeds referred to on the Title Register
- The Special Auction Conditions
- Commercial Property Standard Enquiries – these enquiries will detail the property related documents you need to supply, as well as answer any particular questions about the condition of the property. It is vital that when working through these enquiries that you answer these as accurately as possible as any misleading or false information could lead to a misrepresentation claim. Examples of the documents that will be required include:
- Buildings insurance
- Existing indemnity insurance policies
- Occupational leases and/or tenancy documents
- Rent deposit deeds or protection certificates
- Rent and service charge statements and budgets
- Any applicable licences
- VAT registration documents
- Planning and building regulations, including self-certification documents
- Health and safety documents
- Energy Performance Certificates.
In addition to these details, a solicitor would also request you inform them of any special requirements for the Contract of Sale, for example whether you have any timescales for completion that need to be different to the standard completion timeline of 20 working days after the auction. Please note, this timescale can vary depending on the property in question, the financial situation of the buyer etc.
Providing a complete auction pack on time will assist you with the success of the sale of your property, as buyers may be put off if there is information missing or if you are late providing details.
Written and contributed by: Joe Taylor, Solicitor at Warner Goodman LLP
DISCLAIMER: This article should not be regarded as constituting legal advice in relation to particular circumstances, and is merely a general comment on the relevant topic. If specific advice is required in connection with any of the matters covered in this article, please speak to Warner Goodman LLP directly.