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Property Auctions
Bridging loans for property auctions
Commercial Acceptances is a specialist bridging loan company which provides bridging loans for property auctions.
Commercial Acceptances can provide non status short term bridging loan within the usual property auction time constraints.
Commercial Acceptances do not charge arrangement fees or redemption fees and we do not impose minimum periods, so our bridging loans are perfect for developers who want to renovate a property for onward sale.
Bridging loan company
Commercial Acceptances is a bridging loan company which specialises in short term bridging loans so investors can buy investment properties quickly, carry out works of modernisation and then refinance our bridging loan using long term lenders.
Commercial Acceptances offer fast bridging loans which are ideal for property auction purchases
Property Auctions
Property auctions offer a wide variety of residential and commercial properties and present numerous opportunities to purchasers who are looking to buy a run down investment property to renovate for onward sale or investment.
Property auctions are regularly used by lenders to sell properties they have repossessed and developers, investors and owner occupiers who need to achieve a quick sale. Property Auctions are attractive to these vendors because they offer a sale on a specific date and the purchaser, or the vendor for that matter, cannot change their mind once the hammer has fallen, as this is contractually binding.
First of all you need to decide what and where you are hoping to buy a property and how much you want to spend. Once you have made these important decisions you need to identify suitable property auctioneers and property auction houses.
Property Auction Guide
Our property auction guide below will help answer some of your questions about property auctions.Property Auctioneers
Many of the larger London based property auctioneers offer properties for sale throughout the country and the regional property auctioneers generally offer properties within a certain radius of their offices.
In addition, rural or more unusual properties are often subject to one off or specialist auctions which will be conducted through a local Estate Agent.
Property Auction Houses
You will find that most Property Auction Houses do not advertise to the public as they are still aimed primarily at professional purchasers so you will need to make enquiries on the Web or at your local Estate Agent to determine when and where a property auction that might include properties of interest to you will take place.
Buying property at auction
How much time do you have? You will have to move fast.
Property Auctions usually take place only three or four weeks after the property auction catalogue is first issued. Thereafter, if you are successful at the property auction you will usually have 28 days to complete the purchase, although on occasions, completion may be required within as little as 14 days.
You or your solicitor should refer to the special conditions of sale which I mention later in this property auction guide.
Selecting your property at a property auction
You should decide what type of property you are looking for, be it for your own occupation, an investment property or one for development. Once you have located the Property Auctioneers who may offer properties of interest to you, you should register with these Auctioneers and they will send you a catalogue for their forthcoming property auction.
The first step is to mark those Lots that might be of interest to you and to make sure that you understand how the property is to be offered.
Some Lots will be offered with vacant possession whilst some may be tenanted or partly tenanted and they may not be suitable should you be purchasing a property for your own occupation.
Unfortunately, situations can arise where people have successfully bid at a property auction thinking they have bought the deal of the century not fully understanding that the property was occupied by a regulated tenant and, as such, has the right to occupy it for the rest of their life!
Once you have been through the property auction catalogue and marked off the properties that are of interest, you should call the Auctioneers during office hours to register your interest in the property. This is entirely at your discretion but it will enable the Auctioneer to contact you if the property is going to be withdrawn or if it has been sold prior to the auction. They should also be able to inform you of any major changes to your Lot.
Property auction guide prices
Property auction guide prices are quoted in the auction catalogue and as the names implies, these prices are given for guidance only. It will, however, be an indication as to the price the vendor hopes to achieve.
Property auction reserve prices
The reserve price is the price that the vendor sets with the Auctioneer immediately prior to the property auction. The reserve price is not disclosed and the property will not be sold if bids do not reach the reserve price.
If your bid is close to the reserve you will often hear the Auctioneer state that you are close to the reserve price and you should 'come and speak to us'. If the bidding exceeds the reserve price, the Lot will be sold.
Viewing the property prior to Auction
It is essential that you view the properties which are of interest to you. Viewing arrangements for each Lot are contained in the property auction catalogue and should you experience any difficulties you should call the Auctioneers.
It is common for the Auctioneers to arrange group inspections on Lots they believe will be popular and you may find that you attend the property in the presence of a large number of other people who are interested in that particular property.
Making legal enquiries prior to a property auction
The vendor's solicitors will be asked to prepare a Legal Pack containing copies of all the legal papers that you and your solicitors are likely to need to make an informed decision about the Lot. The Legal Pack should include where appropriate copies of Title Deeds, Leases, office copy entries, planning permissions and answers to standard enquiries.
These packs are available from the Auctioneer or the vendor's solicitors prior to the property auction and are usually available for inspection at the property auction itself. You should expect the Auctioneers to levy a modest charge of approximately £10 to £20 to supply the legal pack.
Special conditions of sale at a Property Auction
Each Lot is sold subject to the Notices and General Conditions of Sale printed in the property auction catalogue. In addition, the vendor's solicitor is asked to draft additional terms applicable to their individual Lot which are known as the Special Conditions. These are not always printed in the auction catalogue and are usually available either from the Auctioneers or from the vendor's solicitor upon request. They form part of the Contract of Sale and it is very important that you and your legal advisors satisfy all of your legal enquiries and are aware of all conditions before you bid at auction.
Obtain a surveyor's report prior to bidding at a property auction
It is preferable to obtain a Surveyor's report prior to bidding at a property auction and if possible and where appropriate a full structural survey.
The disadvantage here is that you may be interested in more than one Lot and having spent the money on a survey, you may not be successful in the room. However, a professional may identify problems you wouldn't spot and you will have a firm indication of the value of the property.
Your surveyor may well have to attend one of the group viewing's. You should be aware that with tenanted properties, access to the property is not always readily available, even after the auction. You should bear this in mind when buying tenanted properties as most long term finance lenders will require an internal inspection of the property.
Bridging loan
If you need to raise a bridging loan it is very important that you obtain approval in principle before the day of the property auction. Many of the larger banks and building societies will not assist with property auction purchases given the time constraints and you should ensure that your finance lender can work comfortably within the limited time available. It is common that properties purchased at auction need works and, as such, are not considered mortgagable security by the lenders and you should make detailed enquiries beforehand. Many people choose to use specialist property finance lenders like Commercial Acceptances to complete the purchase of properties at auction before converting to long term finance thereafter.
Commercial Acceptances can answer any queries you have about bridging loans and can help arrange a fast bridging loan.
Bidding prior to the property auction
It is possible to make an offer for a property prior to the day of the property auction. In order to do so you should contact the Property Auctioneers and make your offer. It is likely that the vendor will let the property go to the room, however there is always a possibility that you will agree a deal before the auction, if your offer matches or betters the best price the vendor believes he will obtain for the property.
If you do agree to buy the property prior to auction, you will be asked to sign the Auction Contract prior to the date of the Auction and your contractual obligations will mirror those had you successfully bid for the property at the Auction.
If you are unable to attend a property auction
If you are not able to attend the property auction there are three ways in which you can bid. Firstly, you can send a friend or perhaps a solicitor to bid for you and it is always advisable to write and inform the Property Auctioneer of your intentions.
We would also suggest that you give your representative a letter confirming that they are bidding at the auction on your behalf. Secondly, you can bid over the telephone by prior arrangement with the Auctioneer.
On the day of the property auction the Auctioneer's representative will inform you of the bidding and relay your bids to the Auctioneer. If you intend to bid by telephone, it is usual that the 10% deposit (subject to a minimum which is covered under the heading Deposit below) must be available to the Auctioneer prior to the property auction day.
Finally, it is possible to bid by Proxy. This requires you to register your highest bid in writing with the Auctioneer together with a deposit for 10% of the figure quoted (also usually subject to a minimum). A member of the property auction staff will then bid on your behalf and may purchase the property for you at a lower figure than your upper limit or at that figure. The Auctioneer will not be able to exceed your maximum Proxy bid.
Property Auction Deposit
At the fall of the Auctioneer's gavel, a property auction deposit by way of 10% of the sale price will be payable. If you have bought a fairly low value property, the Auctioneers may require a minimum deposit often as much as £2,000.
This deposit should be payable by way of a bankers draft or building society cheque. It is highly unlikely that the Auctioneers will accept personal or company cheques unless arrangements have been made at least 3 working days before the property auction. You will find that none of the Property Auctioneers will accept cash.
If you are uncertain how much to obtain a draft for, you should obtain a draft for 10% of your maximum bid price, bearing in mind the Auctioneer's minimum deposit and bring it with you to the auction. If you purchase at a figure below your maximum, the difference will be deducted from your balance figure.
Bidding at the Property Auction
If you have not bid at a property auction before it is advisable to be present when the property auction starts in order to listen to the Auctioneer's opening remarks and follow the bidding in the early Lots.
When the Property Auctioneer announces your Lot he will also bring to your attention any last minute items which you should be made aware of. He will usually read the full address of the property so please double check before bidding that this is the Lot that you are interested in. The Property Auctioneer will then invite bids and you can make this by raising your hand or catalogue.
You should make it clear that you are bidding as it is often quite difficult for the Property Auctioneer to track who is interested in a particular Lot given the large number of people and the constant movement and activity that takes place in the property auction room. If you wish to make a bid other than the bid the Property Auctioneer calls for, please shout out your bid and the Auctioneer may or may not accept it.
The property will be "knocked down" to the highest bidder subject, of course, to it achieving the reserve price. The Auctioneer will give you prior warning that he is about to sell the property by saying something along the lines of "Going for the first time, etc.." before the hammer goes down. Do not leave your bid to the last minute as it is possible that you may lose your dream property.
Successful bidder
If you are the successful bidder, a binding contract is entered into between you and the vendor on the fall of the Auctioneer's gavel.
You will then be approached by a member of the auction staff who will provide you with a bidding slip and ask you to supply the names of the purchaser and the solicitor who will be acting on the purchaser's behalf.
At this point a deposit payment is required amounting to 10% of the sale price or the auctioneer's minimum deposit. This should be handed to the member of staff attending to you and the bidding slip and deposit are then taken to the Auctioneer's clerk who prepares the Contract.
You must sign this Contract before leaving the Auction Room. You should pass a copy of the Contract to your own solicitors and the auctioneers will ensure that a copy of the Contract is supplied to the vendor's solicitors.
As previously stated, completion usually takes place 28 days later, albeit, sometimes the special conditions will provide for an earlier completion.
Property insurance
You should be aware that as soon as contracts have been exchanged for the purchase of the property, you are responsible for insuring the building and you should arrange your buildings / property insurance immediately after the sale.
Unsold lots
If a Lot fails to reach its reserve in the room and you still retain an interest in the property ensure that you register your highest bid with the Auctioneer before leaving the room. The Auctioneer will then contact the vendor and ask them for their instructions and you will be contacted if the vendor is minded to do a deal with you. Alternatively, you should call the Auctioneer after the auction to register your continued interest in the unsold Lot.
Bidding at Auction
Finally, bidding at auction should not be a daunting prospect providing you have done your research and made all your enquiries before the property auction. You should have a maximum figure firmly in mind and it is important that you do not get carried away. If at the time of the property auction you have any nagging doubts or there are some unanswered questions, you are best advised not to bid.
