This section looks at what is actually involved when buying at auction...
Buying property at auction is exactly the same - in legal terms - as buying through private treaty (the conventional method). The process itself, however, is entirely different. Rather than heading to your local estate agents, your first port of call will be an auction house. The Essential Information Group has a useful list of these. You can then ask the auction house for a catalogue of property - individually referred to as 'lots' - which will be printed some weeks in advance of the auction.
There will be a typical two-week block during which you can visit. At this point you should also view the property's legal (or 'auction' pack). Just like a Home Information Pack (HIP), due to become law in June, the legal pack carries all the information you'll need about the property upfront, apart from a valuation or survey.
It's always recommended that you research the property in the same way as you would when buying the ordinary way.
Each lot will have a corresponding auction pack. This includes the title deeds, local authority and environmental searches, fixtures-and-fittings list and a seller's information form. If it's a leasehold property, it will include a copy of the lease and details of service charges and ground rent.
You then need to decide whether to commission a survey. To arrange a Home Buyers Report you can expect to pay in the region of £500 or £600 - more if you want a structural survey.
This can create something of a Catch-22 for novices. If you pay for a survey and your bid isn't successful, you could lose a lot of money. But equally if your bid is successful and you haven't had a survey completed, you will have no idea quite how big a project you are taking on and how much you are going to have to spend.
Once you've decided whether or not you want to buy the property, rather than putting in an offer on the spot, your priority will be to decide the most you are prepared to pay for it and arrange your finance accordingly. Then it's time for the bidding.
Once the hammer has fallen there's no looking back and you need to move fast. This is the equivalent of exchanging contracts when you buy in the conventional way and you'll need to pay a 10% deposit straightaway. You can pay with cash, cheque or banker's draft, and will need two forms of ID such as a passport or utility bill.
You will also have to pay an administration fee to the auction house - typically between £200 and £300. You then have 28 days (or 20 working days) to complete the purchase - that's why it's vital to have your finance arranged first.
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