Thank you for using our property auction service. We certainly appreciate your custom and very much look forward to working with you.
You can rest assured that Property Solvers have many years of experience in helping all kinds of homesellers achieve quick sales. Our auction service is no different.
To be read in conjunction with our Property Solvers Auction Sellers Guide, what follows are some of the key legal aspects you should be aware of when selling your property in this way. Please also check out our blog posts on selling your property at auction and in-depth guide to selling at Modern Method of Auction.
We’re here to help every step of the way and are excited about getting you an excellent outcome…
The legal process when selling a property through an auction is not especially different to an estate agency sale.
However, due to the purchase being confirmed upon the auction’s conclusion (i.e. a winning bid), much of the legal work – also known as conveyancing – often gets completed before listing and allowing people to bid on your property.
In addition to actively marketing your property, dealing with bids and ensuring you get the best possible price, our job here at Property Solvers is to make sure all the legal aspects of the transaction are undertaken in the correct manner.
For this reason, although it’s not compulsory, we generally suggest instructing a conveyancer / conveyancing solicitor to prepare a series of legal documents surrounding your property. This enables bidders to be better-informed on the legal specifics of the transaction which, in turn, will boost your chances of a successful sale.
Firstly, you’ll need to instruct a good conveyancer (solicitor) to produce the auction legal pack for us to upload to the Property Solvers online auction platform.
This will involve completing the property information forms; drafting any Special Conditions of Sale; undertake any necessary searches and ensuring you work with a good conveyancer who can deal with any enquiries raised by potential bidders/buyers.
Once, the winning bid and buyer is in place, your conveyancer will need to undertake a series of other processes, including:
A suitably qualified conveyancer / conveyancing solicitor will need to download and prepare a series of documents related to your property highlighted below, called the legal or property information pack.
Property Solvers will then make this publically available as the property is promoted alongside the property particulars, photos, floorplan, Energy Performance Certificate (EPC) and other relevant documentation.
Note that, as it’s not always feasible to have the full legal pack prepared instantly, we may gradually add further elements as they are passed on from the conveyancer. We may also allow conveyancers we work with on a regular basis to add the documentation directly on to our auction platform.
It will be down to the buyer to comb through the documentation before deciding to bid. They may also make enquiries and seek other clarifications (principally through the conveyancer, but we will help where we can).
It’s worth observing that any bid becomes legally binding should it end up being the highest amount for your property. It’s for this reason why we (as the auctioneer) have to run through so many checks and before allowing buyers to participate.
Although auction legal packs are not a legal requirement, selling without one in place is never really a good idea.
For a start, buyers will often be sceptical and wary about bidding on properties. They may also think that there’s something wrong with the property that you (the seller) are keeping from them. Those that do move forward, will often bid low in order to factor in the buying risks.
Ultimately, it comes down to transparency and (together with the excellent marketing exposure we’ll provide). Having the auction legal pack in place will position your property in the best way.
Normally, when a house is sold through an estate agency (known as ‘private treaty’), the buyer’s conveyancer will undertake the necessary legal checks only once the sale is underway.
However, as auction buyers will be committing to the sale once the hammer falls, most (but not all) will want to have these checks complete before bidding. Having the legal pack in order also means that multiple potential buyers can see view the specifics whenever they need to (rather than each requesting information separately).
Although it may seem like a pain to have to organise things in advance, once you have a winning bidder in place at the close of the auction, things are a lot more plain sailing compared to an estate agency sale.
When selling at auction, we would recommend finding a qualified conveyancer / conveyancing solicitor – preferably one that has solid experience in dealing with auctions.
Note that some sellers choose a DIY conveyancing approach and prepare the legal pack themselves – particularly those that already have some experience in the industry or perhaps have recently bought the property (and have up-to-date documentation to hand).
We would, however, generally recommend the conveyancer undertake this part of the process due to them being familiar with what is necessary and can ensure that no stone is left unturned.
They will also be able to respond to prospective buyers’ enquiries quickly which, in turn, should encourage solid bidding.
Much will depend on the type of the property and the expected workload, but you can generally expect to pay between £500 and £700 (+VAT) for the legal pack. Please note that you will also need to pay a similar amount once the sale is complete (i.e. £1,000 and £1,400 + VAT in total).
Sometimes it is possible, but it will be at the conveyancer’s discretion. Understandably, they are often concerned about taking on the work and clients potentially pulling out during the auction sales process.
The conveyancers that do offer a completion-based fee will probably charge a premium to cover their extra risk.
If you were to pull out of the sale, the conveyancer may reserve the right to charge you a set ‘abortive’ fee (although you can retain the legal documentation in such circumstances).
Good conveyancers should be able to prepare the legal pack within 3 weeks of instruction. However, with much of the delay being due to the searches (particularly the local authority document), it’s possible to get the vast majority of the pack ready for buyers to look at / examine within a week. At Property Solvers, we call this a ‘preliminary legal pack’.
Generally, due to the extra information requests, leasehold property legal packs are going to take longer. For this reason, it’s often worth approaching the freeholder and/or management company to see if they can expedite things a little quicker for you.
It’s usually better to have the entire legal pack viewable on the property listing within at least a few days prior to the start of the bidding. This means that buyers will have all they need and the chances of any ‘low ball’ bids due to a lack of information are minimised.
Many auction buyers take out indemnity insurance such as ‘no search’ or ‘absent freeholders’ policies that effectively protect them against associated risks. If just a couple of searches are missing, it’s usually ok. However, if the essentials such as title documents, plans or leases or not in place, we often suggest delaying things until they are.
Although certain elements of the legal pack would last for longer, search requests would usually have to be reissued after 6 months. It’s highly unusual for an auction property we sell for clients not to sell within this period.
If your property generates a lot of interest during the marketing process, we may receive offers from buyers that are happy to move forward under auction conditions even with no legal pack in place.
In such scenarios, we will call you to discuss any offers that have been made. Should you accept the offer, the buyer will need to agree to our terms + conditions, register on the portal and pay the non-refundable buyer’s fee. Even without a legal pack in place, the buyer is financially committed to completing on the sale (particularly with the unconditional or 28-day auction).
Whilst a pre-auction offer often means that the sale will complete sooner, you may wish to decide to continue with the auction bidding process (especially if there are a lot of potential buyers interested in the property).
You may have this document already but most conveyancers will download an up-to-date copy from the HM Land Registry (at a cost of £3). We also have a copy we can forward.
The Title Register will confirm that you own the property, the amount you originally paid, any charges (such as mortgages and secured loans).
There may also specific information related to restrictive covenants, negative easements, third-party consents and ransom strips. Your solicitor will highlight and explain any issues that you may not be aware of.
This document is a graphical representation of the boundaries of the land surrounding the property and complements the details in the Title Register. This will also be downloaded from the HM Land Registry (at a cost of £3).
Normally undertaken by the seller’s solicitor before the auction sale, conveyancing searches contain a range of information related to the surrounding area. They form an essential part of the auction legal pack and your conveyancer will make a series of requests to local authority and other public bodies.
The main searches include Local Authority (which takes the longest), Environmental, Flood Risk, Water, Drainage, Boundaries, Commons Registration, Land Charges, Chancel Repair, Canal and River, Mining and Solar Panel Approvals.
Buyers will look at these documents to make sure there is nothing out of the ordinary. However, some will take out specific ‘no search’ indemnity insurance policies to protect against any risks particularly as it’s common to hear of delays for searches to arrive prior to the auction.
Having an up-to-date Energy Performance Certificate (EPC) in place is a legal requirement when selling a property.
If the property has been put on the market in the last 10 years, it’s likely that it appears on the EPC register (you can check here).
If not, as part of the auction set-up process, Property Solvers can organise the certificate (often when we take the photos and floorplan for the listing).
These will appear on our website and follow the Royal Institute of Chartered Surveyors (RICS) Common Auction Conditions (4th edition). See our conditional and unconditional documents for England and Wales.
It’s important for buyers to understand how the auction will be run, understand our auction team’s role and responsibilities
For example, if we run a conditional (56-day) auction, a deposit will be payable once the electronic hammer falls and the bid is won. The buyer then has 28 days to exchange contracts and a further 28 days to complete on the sale.
With our unconditional (28-day) auction, the overall time frame is limited to 4 weeks. This means that the buyer will exchange contracts at the fall of the electronic hammer and pay the 10% deposit into our client account. The sale must then complete within 28 days.
The Special Conditions of Sale is a separate document that clearly states any contractual variations on the transaction that the buyer should be aware of.
These may include:
These forms will be sent as part of the ‘Seller’s Pack’ for you to complete to the best of your ability.
This contains a range of information regarding boundaries, disputes / complaints, notices / proposals, alterations / planning / building control, guarantees / warranties, insurance, environmental matters, rights / informal arrangements, parking, other charges, occupiers and services. Download a specimen here.
Another Law Society form completed by the seller that identifies what will and will not be included as part of the sale. This includes basic fittings, appliances across the property (particularly in the kitchen and bathroom), carpets, curtains / curtain rails / blinds, light fittings / switches, fitted units, outdoor items and television receivers. There’s also a question regarding fuel supply. Download a specimen here.
If you do not have all the information about the property you are selling at auction – say it’s an inherited property that you’ve never lived in or a tenanted property – you can simply state ‘sold as seen’ (or your conveyancer will).
If you’re selling a leasehold property, you will need to supply specific details using this form. The questions essentially confirm what’s contained in the lease documentation.
Note that you will also have to supply copies of the lease, supplemental deeds, contact details / correspondence from the landlord / management company, service charge / ground rent confirmations, invoices, audited statements, payment (receipt) confirmation, notices, consents, history of any complaints, documentation on alterations, details on any enfranchisement applications. Download a specimen here.
This form is completed by the landlord or freehold managing agent. It contains key information regarding transfer, registration, ground rents, service charges, building insurance, maintenance agreements, fire safety certificates, any deeds of covenant / certificates of compliance, licences to assign, restrictions, permissions, disputes / enfranchisement issues amongst other finer details. See a specimen here.
This one-page document summarises what’s contained in the LPE1 form and management pack (that will be forwarded to the seller’s conveyancer). The costs ground rent, service charges and insurance premium costs will all be stated alongside details of the sinking or reserve fund. The management company may also include bank statements. See a specimen here.
Only necessary if you’re selling a leasehold flat (although some houses are leasehold too), the leasehold management pack will be sent with the LPE1 form and typically contain the following:
If you’re selling a tenanted property (with tenants in situ), auction bidders will often want to see all the necessary information.
This would typically include:
Please note that the above is an exhaustive list that, in reality, is not always provided at auction sales. We would recommend focusing on gathering as much as you can (the last 7 ticks above are not completely necessary).
If you do not (or cannot) supply the majority of the above, buyers may make cautious bids due to the perceived risk that could be involved when buying the property.
Auctions have long been a well-recognised way to sell commercial property. The often complex nature of these types of sales tends to limit the buyer market to professional investors.
Indeed, you’ll often find that commercial property buyers regularly check out the auction portals for opportunities. By and large, they tend to adopt a more technical approach and will often request detailed information.
Much of what is necessary to provide can be supplied through conveyancers in the legal pack. You may also need to consult with an accountant in relation to any tax-related issues.
In terms of what you should supply, the following is a good starting point:
Similar to commercial property, land buyers usually request to see a range of details. Indeed, many of the due diligence processes overlap.
Information to provide includes (but is not limited to):