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Auction Purchase and Legals


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Hi,

Can anyone help, looking to make what will be our first purchase from auction, bid on a few in the past but not been successful. I'll be using bridging finance which shouldn't be a problem but its the legals I'm not sure on.  The property in question isn't totally straightforward as its been added to over the years. I have access to all the legal docs but to the untrained eye it doesn't mean an awful lot. What I need to be sure of, before I purchase, is that the property legals are in order and it will be fully mortgage-able when developed and good for immediate short term bridging finance. 

Is it just a case of approaching a solicitor and asking them for some advice, maybe paying up front with a view to using them if the purchase is successful? I'd be interested to know how others approach this. The bidding will be competitive so I'm keen not to spend a fortune before I even know if I'm going to be successful. 

TIA...

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Many solicitors will review the legal pack for a small fee - say £100 - Majority of the legal pack is straightforward but the land registry docs def need a trained eye to check over. If you have a regular solicitor you use then they will do a quick scan for free as they know you and know they will get the business. The other key doc is the contract as many auction will want all their and the sellers fees paid by the buyer so an extra 5-10k on top of highest bid is not unusual around here )midlands). The  odds of winning at auction these days is <5% if you are an investor looking for a decent deal as there are plenty of cash buyers and investors happy to pay over the odds. I’m guessing that if you are using bridging then you will have extra costs so would expect a reduced price versus market value so defiantly a tough way to buy in a hot market

Good luck

 

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On 4/24/2022 at 9:04 AM, haf1963 said:

Many solicitors will review the legal pack for a small fee - say £100 - Majority of the legal pack is straightforward but the land registry docs def need a trained eye to check over. If you have a regular solicitor you use then they will do a quick scan for free as they know you and know they will get the business. The other key doc is the contract as many auction will want all their and the sellers fees paid by the buyer so an extra 5-10k on top of highest bid is not unusual around here )midlands). The  odds of winning at auction these days is <5% if you are an investor looking for a decent deal as there are plenty of cash buyers and investors happy to pay over the odds. I’m guessing that if you are using bridging then you will have extra costs so would expect a reduced price versus market value so defiantly a tough way to buy in a hot market

Good luck

 

Thanks for the info, yes I agree auctions these days in my experience often don't offer value, plus bridging is expensive. Just had a quote for conveyancing and its an extra £1,200 if there is any bridging finance involved which I wasn't aware of, that's obviously on top of the fees for finance, unless its a biggish project that can wipe out a chunk of any potential profit. I fully expect it to go for more than its worth to me but we'll see!

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