Unconditional vs conditional auction
- Unconditional (traditional): exchange at hammer fall — 10% deposit on the day, completion within 28 days, no cooling-off period, all due diligence must be completed before bidding
- Conditional (modern method): non-refundable reservation fee paid at auction, 40-56 day exclusivity period to exchange and complete — allows post-bid survey and mortgage finance, but reservation fee is lost if you withdraw
- Guide price vs reserve: guide price indicates likely sale price; reserve price is the confidential minimum the seller will accept — properties often sell above guide
- Post-auction purchase: where a lot fails to sell (reserve not met), it can often be bought post-auction at negotiated price without the 28-day obligation
Legal pack due diligence — before you bid
- Contents: title register, title plan, special conditions of sale, searches, tenancy agreements (if tenanted), lease documents, EPC, planning history
- Solicitor review essential: check for title defects, restrictive covenants, lease issues, tenancy arrears, outdated searches, and special conditions imposing buyer costs
- Tenancy issues: for tenanted properties, check: valid AST or periodic tenancy, rent level, arrears, deposit protection details, any outstanding notices
- Special conditions: can impose significant additional buyer costs — seller's legal fees, VAT on purchase, required structural works — read every condition before bidding
Cannot withdraw after the hammer
Problems discovered after the auction cannot be used to withdraw from an unconditional purchase without forfeiting the 10% deposit and risking a damages claim. All due diligence — legal pack review, structural survey, finance confirmation — must be complete before you bid.
Survey, finance, and tax
- Pre-auction survey: request access before the auction, commission RICS Level 2 or Level 3 survey, obtain contractor quotes for identified defects
- Auction bridging finance: specialist lenders complete in 3-14 days at 0.5-1.5% per month; obtain decision-in-principle before attending; exit onto BTL mortgage after completion
- Cash purchase: fastest and cheapest — but instruct solicitor before the auction to move immediately after the hammer
- SDLT: same rates as conventional purchase — 3% additional dwellings surcharge applies; payable within 14 days of completion
- VAT on commercial properties: where seller has opted to tax, 20% VAT applies — disclosed in special conditions; seek specialist advice