Auctions are becoming an increasingly popular way to buy and sell land and property. Whether it’s a farm, a residential home, or a commercial warehouse, auctions offer a real alternative to your traditional private sale.

There are clear advantages for both buyers and sellers, but there are certainly some pitfalls to watch out for.

Why auction?

There is potential for numerous interested parties to compete against each other, increasing the final purchase price for the seller. The process is fast paced, often being preferred by landowners who just want to get the sale done.

The auction hearing ends when the hammer falls. The striking sound of the gavel against the wooden block indicates an agreement to sell and buy a particular plot of land or property. There is no backing out after this point, which may provide certainty to the parties involved.

Why buy at auction?

Taking advantage of under market value properties, the savvy purchaser may grow their portfolio, or the local equestrian may find a new home for their beloved horses. Auctions are open to everyone, and everyone has a chance to compete.

It’s not all sunshine and rainbows

Given the speedy nature, it is not surprising to hear there are some pitfalls that may catch you out.

Bidding without investigating is akin to a cardinal sin for us property lawyers. Unlike traditional private sales, there may not simply be enough time to review all the documentation in the legal pack to truly understand whether you can use the land for your intended use.

A planning restriction or right of way issue may be hiding in the depths of the legal pack so it is imperative to contact your lawyer early in the process. What would be worse than buying your dream home but not realising you have no legal way to access it?

Another issue to consider is any premiums or hidden costs. It’s all well and good securing a solid deal on a piece of land, but you should be aware of any auctioneer or buyers’ premiums lurking in the Special Conditions. 

All in all

On the face of it, auctions can provide an alternative to a traditional conveyancing transaction, whether you are an executor trying to sell your loved-one’s property, or whether you are a local farmer wanting to add to your farm. But you should be aware of the potential pitfalls.

Pardoes Solicitors would be delighted to assist you, your family and your business.