Buying a Home by Auction: Risks, Rewards & Legal Red Flags

Understanding the Auction Process

Buying a property at auction can be an exciting way to find a bargain but it also carries significant risks. When the hammer falls, you’re legally committed to the purchase, usually with just 28 days to complete. That means there’s no time to carry out the usual conveyancing checks after you’ve won the bid. You buy the property with any legal issues even if you don't know about them.

Do Your Due Diligence Early

Before bidding, always review the auction legal pack carefully. This should include the title documents, searches, and any special conditions. However, auction packs can sometimes be incomplete or contain unusual clauses. A solicitor such as Marsons Solicitors can help identify potential issues such as restrictive covenants, missing planning permissions, or hidden liabilities.

Budget Beyond the Hammer Price

Remember to factor in buyer’s fees, stamp duty, and any immediate repair costs. Some properties are sold “as seen” and may require significant work before they’re habitable. By getting professional legal advice before the auction, you can avoid unpleasant surprises and bid with confidence.

The Importance of Acting Quickly After the Auction

Once your bid is successful, you’ll need to exchange contracts immediately and pay a deposit which is usually 10% of the purchase price. There’s no backing out, and failure to complete can mean losing your deposit and facing legal action. Having a solicitor lined up in advance ensures a smooth completion and reduces the risk of costly delays. It also means your solicitor can act fast to raise any title issues as soon as the auction ends.

If you’re planning to buy a property at auction, contact our conveyancing team at Marsons Solicitors before you bid. We’ll review the legal pack, highlight potential risks, and guide you through the post-auction process so you can make an informed decision and complete with confidence.

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