In recent times, there has been a huge increase in the number of properties being bought at auction and it has fast become a popular way to buy and sell properties for individuals, banks and receivers.
Properties sold at auction are sold then ‘as is’ and the age-old caution of ‘Caveat Emptor’ applies more so to properties being sought at auction. Our advice to you is to always do your homework before you place that bid.
The following are a few practical steps that purchasers should follow before bidding at auction:
- It is vital that you instruct a solicitor to review the contracts and title documents for the property. Your solicitor can review the contract and the title and raise the necessary pre-contract enquiries prior to the auction and explain any significant special conditions contained in the contract for sale.
- If you are relying on a mortgage to purchase the property, loan approval must be in place before you attend at the auction to bid. Moreover, the title to the property must be good marketable title. If there are any shortcomings in the title to the property, your solicitor will need to qualify the title with the bank, who will then decide whether or not they wish to release mortgage funds on foot of this purchase.
- It is also vitally important to retain a qualified surveyor/engineer to inspect the property to ensure that the property is structurally sound, that there are no major defects in the property. The surveyor/engineer will carry out a full check that the property is structurally sound, that there are no extensions or alterations other than those authorised by the planning that appears on the title. The surveyor/engineer will also check the boundaries to the property and ensure that it fully corresponds with that on the title map.
- You should also attend at your Local Authority Planning Office to investigate whether there are any developments planned or envisaged in the area, such as major road routes, housing estates, commercial builds, etc.
- You should also enquire as to the full legal costs involved in purchasing the property, i.e. solicitor’s fees, stamp duty and registration fees. The current rate of stamp duty in residential properties is 1% up to €1 million and 2% thereafter. Non residential property, i.e. commercial premises/land, is stamped at a rate of 6%.
These practical steps will ensure that you know exactly what you are buying before you attend at auction. The importance of doing your homework before attending at auction cannot be overemphasised. Once the gavel falls at auction, you are required to sign the contract and pay a non-refundable deposit. This forms a binding contract between you and the vendor of this property.
Remember, if it looks too good to be true, it usually is. Don’t get caught at auction, call us today where one of our experienced conveyancing practitioners can provide all of the necessary advise and assistance prior to auction. We can be contacted on 0749175989 or by email at [email protected].
*In contentious business a Solicitor may not calculate fees or other charges as a percentage or proportion of any award or settlement.
**This information is for guidance purposes only. It does not constitute legal or professional advice. Professional or legal advice should be obtained before taking or refraining from any action as a result of the contents of this publication. No liability is accepted by McElhinney & Associates for any action taken in reliance on the information contained herein. Any and all information is subject to change.