Auction - Legal Pack

Wig

I am possibly going to be bidding on a property at auction soon. I have the usual dilemma of whether to put in an pre auction offer or just try my luck

Guide price 64K
Last on the market at 94K (i.e. estate agent price)

Thinking of offering about 65 - 70 K but I think I will chance it and just go to auction and see what happens.

What is a Legal pack at auction? What does it contain, what should I be looking out for within the legal pack?

tigergold

Very much doubt, you would get the property for 65 - 70 K. they are probably looking to get 90-100K especially if its desirable:
Take a look here: to see how much other propertys have sold for:
http://www.nethouseprices.com/
Legal pack can be bought b4 the auction, or can read it b4 the auction, but get there early to make sure you get to see it.
somone can answer better whats in it, but its all important stuff, are there any orders on the property for necessary works (like if its in a block of flats and need to contirbute money), site plans

clutton_2

crucial that you get it - absolutely crucial - cross check it with Land Registry information. check if there is more than one charge on the property. is the boundary on the map the same as what you think you are buying. if it is leasehold - get it checked with a solicitor first.

Tiger_greeneyes

I wouldn't touch an auction property without looking at the legal pack first - and sending it to my solicitor to check through, too.

The legal pack is all the information your solicitor would go through if you were buying the house in the usual way. You really shouldn't ignore it - or buy without your solicitor checking first - unless you know what you're doing or can afford to make very expensive mistakes.

It's worth contacting a few solicitors to find a good one - lots of solicitors hate auction properties. Get proper advice from them about the way to proceed with auction properties, and if you can, attend a few auctions first, just so you learn the ropes.

They're not for the faint hearted. Watch for things like the auctioneer bidding 'off the wall' whereby if you're the only one bidding, they'll pretend there's someone else in the room bidding too - to get the best price for their client. You really should be well informed and know what you're up against if you're going down this route of purchasing.

Check the small print too - you don't want to be stung for auctioneers charges. Some of the vendors have it written into the legal pack that you pay all their solicitors costs, too.

If it all goes well, then you can get a bargain

Good luck!

Wig

Tiger_greeneyes wrote:

They're not for the faint hearted. Watch for things like the auctioneer bidding 'off the wall' whereby if you're the only one bidding, they'll pretend there's someone else in the room bidding too - to get the best price for their client. You really should be well informed and know what you're up against if you're going down this route of purchasing.

There's nothing you can do about it, even if you do spot him doing it. He's legally allowed to do it up to the reserve price, and you don't know what the reserve is. All you can do is try to bluff him as to how high you are prepared to go.

Check the small print too - you don't want to be stung for auctioneers charges. Some of the vendors have it written into the legal pack that you pay all their solicitors costs, too.

That's certainly something to look for.

Tiger_greeneyes

Wig wrote:

There's nothing you can do about it, even if you do spot him doing it. He's legally allowed to do it up to the reserve price, and you don't know what the reserve is. All you can do is try to bluff him as to how high you are prepared to go.

There is one thing you can do - if you spot this happening and don't feel comfortable then you don't have to bid. Auctioneers sometimes use their discretion if you're within a small percentage of the reserve - and sell even though it's not hit the reserve. If the property doesn't sell because you're the only bidder, then you could make an offer afterwards - it's in the auction because the vendor wants to sell - they'll doubtless accept a good offer.

This has emphasised my earlier point about going to a few auctions beforehand

clutton_2

once the hammer has fallen you will exchange contracts and pay the deposit - usually 10% - if you do not complete in 28 days, (unless it says otherwise in the auctioneers literature) you will lose your deposit - it happens every week - so be prepared. You really need to have got a DIP Decision in Principle from your mortgage lender if at all possible in advance.

david29dpo

sorry, but it you dont know what a legal pack is you souldnt be buying at a auction yet. do some more homework first.

Richard_Webster

Sometimes properties (particularly flats) are put in auctions because there is a legal problem with them, and the seller hopes that someone won't look at the legal pack, or won't understand it if he does - so it is vital you get a solicitor to check it over for you!

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients