Buying a property at auction: What happens on auction day?

If you are buying a property at auction in the UK, especially if it is your first time doing so, it is important to understand beforehand what happens on auction day. Much of the following information applies both to online auctions and physical auctions that you attend ‘in room’– and the following points will prepare you well for the big day.

Before participating in an auction it’s important that you prepare well, doing your research on properties that interest you, downloading and reading the relevant legal packs, getting your deposit pre-arranged, making provisional mortgage arrangements, setting a budget for yourself and understanding the terms and conditions that apply to purchasing at auction.

With online auctions, like those hosted regularly here at Mark Jenkinson, you also need to ensure you give yourself enough time to register to bid before the auction and once your registration is verified acquire pre-authorisation of your bidding deposit. This is in fact very straight forward and is explained in more detail in our Online property auction guide.

If you’ve ticked all those boxes you will be well-positioned once the auction actually gets underway. It is also important to ensure that in the case of an online auction you have a fast and reliable internet connection, be it mobile or wifi. If your connection drops or lags at a
critical point in the auction you might end up missing out on the desired property.

On the day of the auction you should ensure that you are punctual in turning up or logging in on time so that you are fully aware of everything that is happening as the auction gets underway. If there are updates to the information about any of the auction properties this will be announced before the auction commences and being aware of these potential alterations is crucial as they could significantly impact your decision to bid or buy.

When considering your bidding strategy you’ll need to keep your maximum bid in mind and it is advisable to stick to that budget. Remember that the guide price is an approximate indication of what the property could sell for and the final sale price might be well above this amount. The reserve price – which is the minimum amount the seller will accept – is not disclosed to auction participants and can be several per cent higher than the guide price.

Keep this in mind when bidding and be prepared to ‘think on your feet’ about where the price is going and where you feel the real value sits. If the auction is ‘in room’ you must make your bids clear and concise to ensure that they are acknowledged by the auctioneer. If the
auction is online make sure that your bids are registering correctly and in a timely fashion (again the reliability of your connection is key here).

If you are successful in winning the auction with your bid then you are legally bound to complete the purchase. Once the gravel falls – or the online auction successfully concludes – in your favour, you are legally responsible for immediately paying the deposit (usually 10% of the sale price) and completing the purchase in the required timeframe, which is usually 14 days to six weeks after the auction date.

As the successful bidder you are also legally responsible for the insurance of the property from the moment your bid is accepted at auction. If you later decide to pull out of the purchase you will face significant costs.

If you participate in an auction where the property remains unsold – which can happen if there are no bids which meet the reserve price – you can still register your interest to buy the property. The seller might be willing to accept a price slightly below the reserve price having failed to sell at auction, so your interest to purchase can be communicated through the auctioneer or website at the end of the auction.