Buying at Auction - Pre Auction Costs?

casterweb

Hi All

I've seen a property I'm interested in buying. It's going to auction. I've never purchased a property at an auction before. The guide price is £100K but I expect it to go for more.

Before I make a bid at the auction I'll need to instruct a solicitor.

If, worst case scenario, I'm outbid at the auction, what approx costs will I have run up at the solicitor's? (i.e now wasted money!)

I'm trying to weigh up the risks and rewards.

(I know the costs of the survey, it's the solicitors fees I'm unsure about)

anselld

It depends on your attitude to risk.
When the hammer comes down you have effectively exchanged contracts. Hence most solicitors will advise spending most of the normal costs prior to auction. However, there are plenty of people (cash buyers) who are prepared to take the risk of not doing so.

Fire_Fox

Survey, solicitor to check the buyer's pack - ask them for a quote.

casterweb

anselld wrote: »

It depends on your attitude to risk.
When the hammer comes down you have effectively exchanged contracts. Hence most solicitors will advise spending most of the normal costs prior to auction. However, there are plenty of people (cash buyers) who are prepared to take the risk of not doing so.

I'm a cash buyer but as I'll be buying the place for me to live in (rather than an investment buy), I still want the solicitor to do the searches and all the other legals before I bid.

So if I am reading you right, most of the conveyancing costs are incurred up to the point of exchange anyway i.e the same point as the fall of the gavel. So the difference in costs of bidding at auction (and being unsuccessful), and the normal conveyancing costs taking it up to completion are not that different?

eg if my solicitor's normal conveyancing fees are £500 for a purchase, bidding at auction and being unsuccessful would cost me a similar amount - with a slight reduction for not completing? Is that about right?

anselld

casterweb wrote: »

I'm a cash buyer but as I'll be buying the place for me to live in (rather than an investment buy), I still want the solicitor to do the searches and all the other legals before I bid.

So if I am reading you right, most of the conveyancing costs are incurred up to the point of exchange anyway i.e the same point as the fall of the gavel. So the difference in costs of bidding at auction (and being unsuccessful), and the normal conveyancing costs taking it up to completion are not that different?

eg if my solicitor's normal conveyancing fees are £500 for a purchase, bidding at auction and being unsuccessful would cost me a similar amount - with a slight reduction for not completing? Is that about right?

Yes, thats about right.

Richard_Webster

Usually the main searches are in the pre-auction pack and it is only the successful bidder who pays for those so if you don't get it you make that saving.

In general terms you could be spending £300-£500 on legal advice etc pre-contract, plus the cost of a survey. If it is a flat then the costs are likely to be more because there is more to look into.

casterweb

anselld wrote: »

It depends on your attitude to risk.
When the hammer comes down you have effectively exchanged contracts. Hence most solicitors will advise spending most of the normal costs prior to auction. However, there are plenty of people (cash buyers) who are prepared to take the risk of not doing so.

So look through the online legal pack, conditions of sale, any special conditions etc yourself, rather than instruct a solicitor to start the legals? Then only instruct a solicitor after placing the winning bid? Like you say, there is some risk involved.

I suppose it's feasible, providing it's a pretty straightforward sale of a untenanted, freehold property, with a clear title etc

Anyone on here brave enough to admit they buy at auction and carry out their own legal checks pre-auction?