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Securing auction properties before the auction


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Does anyone have any experience/tips for securing property listed for auction before the auction date?

Looking at property for BRR and auction lots look good, but I am not keen to outlay solicitors costs only to be outbid.

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Not sure there is much of a difference in terms of solicitors costs as you will need the legal pack checked whichever way you go - most solicitors will do this at a low cost anyway. In terms of pre-auction then firstly you need to see if the vendor will even accept an offer as some properties (council etc) do not. Then you have to make the offer that the seller will take seriously as the auctioneer will know what price the property is likely to sell for - no real chance of getting a low price accepted. Then you have to complete in the same timeframe as you would had you bought at auction. 

I would say that pre-auction works if there is one property in particular that you really want and are prepared to pay the market rate for. Otherwise there is no real benefit as bidding means you can try multiple properties and hope one has low interest on auction day

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  • 3 weeks later...

Would be interested to hear from solicitors on this - and what you mean by low cost - I have been quoted about 50% of full fee for the review of the particulars pre-sale; this to me is a prohibitive cost given the risk of not securing the property

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It does depend on your relationship with solicitor and if you need a 'full' review of the legal pack versus a 'once-over' to spot any major negatives. My solicitor will check over a legal pack for free by giving the docs a quick scan and pointing out any 'gotcha's. He is not responsible for any advice he gives me nor do I hold him accountable if he misses anything. 

Just depends on how thorough a job you want doing... 

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  • 3 weeks later...

Most auction houses offer a pre-auction bid option. Your solicitor should review the legal pack in full and make any enquiries asap and then you are usually given the option to view the property and can then make a pre-auction bid. Many of our clients have recently lost out on auction properties that have been sold prior to the auction date via pre-auction bids but we are still seeing the sale prices exceed the guide price as demand is high (specifically most of our clients interest surrounds properties in need of substantial refurbishment so I cannot comment on whether the same demand and high bids applies for completed property in a good condition). The important factor is the legal pack and any concerns within it. If you miss something and bid, you are committed to paying the deposit (and potentially additional costs such as vendors expenses, re-submission to another auction and losses incurred as a result of a non-sale) that may be sought by the vendor should you decide not to proceed with the sale post exchange of contracts because something you were not aware of suddenly comes up and causes a problem. 

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