Property auctions A clear, impartial guide to
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A clear, impartial guide to…
Property auctions
Buying | Selling | Observing
www.rics.org/usefulguidesContents Introduction
03 Introduction Property auctions have become increasingly popular
03 What is RICS? with both buyers and sellers – whether they’re owners,
04 Buying at auction occupiers, developers or investors.
07 Selling at auction
09 Useful links If you’re thinking of buying or This guide aims to tell you more about
10 Free RICS guides selling a property at auction, it the auction process from both a buyer
may be in your interests to make and seller’s point of view, and what you
11 Further information sure the auctioneer is an RICS can expect.
11 Find an RICS member (Royal Institution of Chartered
Surveyors) member.
What is RICS?
AUCTION
RICS is the largest organisation for Using the services of RICS members offers
professionals working in property, real peace of mind because:
land and construction worldwide. I We give you clear, impartial and
If you’re selling a property at auction, expert advice
you may want to use an auctioneer who I We have strict codes of conduct to
is an RICS member. If you’re looking to protect you – including proper insurance
buy a property at auction, an RICS surveyor
I As RICS members we have to update
can ensure the investment you make is a
sound one. our skills and knowledge throughout our
careers, so you can rely on our expertise
I You are further protected by our formal
complaints service.
02 www.rics.org/usefulguides www.rics.org/usefulguides 03Buying at auction
Advantages of buying at auction Before the auction Try to get hold of the specific information Finally, you need to arrange finance – both
relating to the lot (or lots) you’re thinking of for the exchange (normally a 10% deposit)
Buying at auction has become a more As a potential buyer, your first step is to get
buying. From the seller’s solicitor you need: and completion. If the auctioneer is following
popular method of purchase in recent years. a copy of the catalogue from the auctioneer.
I The legal pack, which contains RICS Common Auction Conditions, completion
The main advantages are: This contains the ‘lots’ (properties) to be
documents such as title information, will be 20 working days after the auction.
I Certainty, control and transparency – as a auctioned. Always deal with the auctioneer
direct – this way you can be sure you have searches and leasehold documents Once you’ve decided to bid, tell the auctioneer
buyer, you are in control, deciding when
the most accurate and up-to-date I Any special conditions of sale you’re interested in the property and keep in
to bid and how high or low you wish to
information. And if you’re viewing online, regular contact.
go. A purchaser is able to buy the From the auctioneer you need:
property at a price that was achieved make sure you’re looking at the auctioneer’s Next, you need to find out what the
official website, not one of the many listing I The guide price, which can change
competitively against other bidders in a auctioneer’s procedures are for
transparent process, and if your bid is sites that have no connection with them. throughout the marketing period. It’s the following:
successful, then the property is yours on Look through the following worth checking what the auctioneer
I Proxy, internet or telephone bidding
completion. The vendor cannot withdraw general information: defines as the guide price too – for
instance, they may call it ‘the seller’s (if you or your solicitor or agent can’t
I It is possible to buy properties quickly. If I The Important Notice to Bidders attend the auction)
minimum price expectation’
you are well organised, properly advised I The Memorandum of Sale I Signing the Memorandum of Sale,
I Any addendum, which you can get
and have the requisite financial resources, and responsibility for insurance on
I The general conditions of sale (many before or at the auction – this tells you
you can exchange contracts in a matter of the property from and including the
days. If the auctioneer is following RICS auctioneers already use RICS Common about any additions or amendments to
the catalogue that have come up and auction day. Generally, insurance on
Common Auction Conditions, completion Auction Conditions, which you can
might affect the sale of the property. the property is up to the buyer as soon
will be 20 working days after the auction download free from our website at
as the hammer falls
www.rics.org/cac) It’s worth keeping in regular contact with
I You may find properties are on offer with I Paying the deposit
attractive low guide prices, although the the auctioneer so you know about any
addendums or changes to the guide price, I VAT – the auctioneer will ask the seller
eventual sale price will be determined by
the level of competition in the room. and if the lot is sold or withdrawn before whether or not the sale is subject to VAT.
the auction. If so, you need to know the impact of VAT
Before you decide whether or not you on the deposit and completion amounts
should bid, make sure the information you’ve I Checking your ID
349
154 been given about the property is correct –
it’s worth getting professional advice and
both a valuation and an appropriate survey
before you buy (see further the free RICS
I Pre-registration.
guide ‘Property Surveys’, available at
603 www.rics.org/propertysurveys)
04 www.rics.org/usefulguides www.rics.org/usefulguides 05Selling at auction
The immediate run-up to When the lot is unsold The advantages of selling The terms of appointment will include:
the auction If a lot doesn’t reach its reserve price, the at auction are: I Their commission if the property sells at
On the morning of the auction (or last thing auctioneer says it hasn’t been sold and I Certainty – properties are not sold ‘subject auction, or if it’s withdrawn or sold before
the day prior to the auction) it is worth calling doesn’t bring down the hammer. to contract’ in the same way as happens the auction, or sold after the auction
the auctioneers and checking that the property If this happens with your prospective lot, via a traditional estate agency sale method. I Any extra charges and whether you’re
you wish to bid for has not been withdrawn or make sure you leave your contact details The successful bidder is legally obliged to liable for them.
already sold. This may save an unnecessary with the auction team so you can find out complete the sale once the gavel falls
journey and related travel costs. The terms of appointment will also include
about any post-auction sale. I Good marketing exposure – many the auctioneer’s right to:
Auction day If you are still unclear about anything then auctioneers advertise in national, local
I End or change the appointment
contact the auctioneers who should be and trade press
Make sure you arrive at the auction in time I Instruct your solicitor to prepare the legal
able to provide you with further information. I Good sale price – with a set guide price,
to check the addendum for any changes pack and special conditions of sale, and
relating to the lot you want. Also, listen out your property should be able to achieve
the best possible market price to attend the auction
for any announcements about the lot in the
I Act on your behalf in the auction room,
auctioneer’s opening remarks. I Speed – sale is relatively quick and
completion usually takes place 20 working including signing the Memorandum of Sale
When the lot is sold days after the auction if the auctioneer is I Manage things in the auction room,
Before the hammer goes down, the using RICS Common Auction Conditions, including the bidding increments
auctioneer points to the highest bidder which you can download from our website I Sell the property at the reserve price
and states the final amount bid. Once the at www.rics.org/cac or above.
hammer falls, there is a binding contract,
which is subject to the conditions of sale. Before the auction You also have to agree procedures for the
If you want to sell a property at auction, first following with the auctioneer:
If you’re the buyer, a member of the auction
ask the auctioneer’s advice about its saleability, I Amendments to the reserve and
team will then approach you to get the
information they need to complete the and what they would recommend as the guide price
Memorandum of Sale and other relevant guide and reserve prices. I Putting up sale boards at the property
documentation. They’ll also ask you to pay Once you’ve checked the date and venue I Exclusive advertising, including cost
the deposit and supply your ID. of the proposed auction, ask the auctioneer
I Inspections by potential buyers
for details of the terms of appointment. You
need to agree these before the auctioneer I Proxy, internet and telephone bidding
does anything. I Identifying the successful bidder, getting
Auctioneers have to follow a number of the deposit cheque and signing the
statutory regulations, including the Estate Memorandum of Sale
Agents Act 1979. RICS surveyors are also I Dealing with any unsold lots.
obliged to follow the RICS Rules of Conduct.
06 www.rics.org/usefulguides www.rics.org/usefulguides 07Useful links
The terms of appointment will include While the auction properties are being Here are some useful website addresses for
a warranty that the information you’ve advertised, the auctioneer should tell
supplied, or has been supplied on your you about the level of interest in your
advice on property auctions:
behalf, is accurate. You also need to be property and let you know if you get
aware of any disclaimers. any prior offers, unless their terms of
In most cases, the auctioneer will be your appointment state otherwise.
sole agent. However, if you want to take Royal Institution Land Registry
Auction day of Chartered Surveyors
on an associate auctioneer, they’ll need www.landreg.gov.uk
to agree their respective responsibilities, If the lot is sold www.rics.org
duties and fees with the auctioneer. Council of Mortgage Lenders
Even though you’ll probably be at the Essential Information Group
Both you and your solicitor need to see auction, when the hammer comes down www.cml.org.uk
the auctioneer’s general conditions of sale. it signifies a binding contract, and it’s www.eigroup.co.uk
Law Society
These are often RICS Common Auction the auctioneer or clerk who signs and
Focus www.lawsociety.org.uk
Conditions, see www.rics.org/cac exchanges the Memorandum of Sale
with the buyer and collects the deposit. www.focusnet.co.uk
Anti-money laundering regulations mean
the auctioneer has to carry out money If the auctioneer is using the RICS Common Investment Property Databank
laundering checks, including proof of identity Auction Conditions, completion will be 20
www.ipd.com
and address, as soon as they can. working days after the auction.
Property Mall
Auction particulars
www.propertymall.com
The next step is preparing the auction If the lot is unsold
particulars. These may form part of your Which?
If the lot doesn’t reach your reserve price,
auction contract, and include any plans
you need to know what the auctioneer’s www.which.co.uk
or photos of the property, which must be
procedure is for dealing with unsold lots.
as up-to-date as possible. The particulars Inland Revenue
must be factual and accurate, complying
with the Property Misdescriptions Act 1991. www.hmrc.gov.uk
You need to liaise with your solicitor to
make sure you’ve revealed anything that
could affect the sale of the property to the
auctioneer – for instance public health
notices, local land charges, major arrears
of rent or service charge, or disputes.
0808 www.rics.org/usefulguides www.rics.org/usefulguides 09Free RICS guides For more information
We hope this guide is useful to Visit our website
you. If you’d like to know more www.rics.org/propertyauctions
about property auctions or how
RICS can help you contact us. alternatively email
contactrics@rics.org
or call the RICS Contact Centre
0870 333 1600
Consumer helplines
RICS offers telephone 0870 333 1600
Just call
helplines giving you 30 minutes and you will be put in touch with
free advice on: an RICS member local to you,
I Boundary disputes willing to provide a free 30 minute
initial consultation. Lines are open
I Party walls 0830 - 1730 (GMT), Monday to Friday.
I Compulsory purchase
RICS have a range of free guides I Letting a property
available for the property issues I Renting a property
listed below.
I Buying a home
I Flooding Find an RICS member
I Property auctions
I Selling your home
I Buying and selling art If you want to find independent, To find a chartered surveyor
I Property surveys impartial advice from a qualified in your area visit
and antiques at auction
I Extending your home To order your free copies, call
professional with good local www.ricsfirms.com
knowledge, contact us.
I Subsidence alternatively email
I Boundary disputes
0870 333 1600 Look out for firms that are ‘Regulated by
contactrics@rics.org
or alternatively email RICS’. Estate agents and surveying firms
I Party walls that are regulated by RICS will be easier
contactrics@rics.org or call the RICS Contact Centre
to spot as they will be using ‘Regulated
I Right to light or visit our website by RICS’ on their stationery and 0870 333 1600
I Compulsory purchase www.rics.org/usefulguides advertising material.
10 www.rics.org/usefulguides www.rics.org/usefulguides 11January 2008/10000/RICSMarketing/indigo
RICS (Royal Institution of Chartered Surveyors) is the
leading organisation of its kind in the world for professionals
in property, land, construction and related environmental
issues. As part of our role we help to set, maintain and
regulate standards – as well as providing impartial advice
to Governments and policymakers. RICS has 140,000
members who operate out of 146 countries, supported
by an extensive network of regional offices located in every
continent around the world. To ensure that our members
are able to provide the quality of advice and level of integrity
required by the market, RICS qualifications are only awarded
to individuals who meet the most rigorous requirements for
both education and experience and who are prepared to
maintain high standards in the public interest. With this
in mind it’s perhaps not surprising that the letters RICS
represent the mark of property professionalism worldwide.
Your local RICS member
The Royal Institution of
Chartered Surveyors
12 Great George Street
Parliament Square
London SW1P 3AD
United Kingdom
T 0870 333 1600
F 020 7334 3811
contactrics@rics.org
www.rics.org
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