Buying a Property at Auction: A Legal Perspective
A residential property auction allows properties to be sold in a fixed, fast paced time frame to the highest bidder. They have become increasingly common in recent years, supported by a rise in online bidding platforms. In fact, according to The Negotiator, the number of residential properties sold at auction increased by a whopping 53% between 2025 and 2026. So, if you are looking into buying a property at auction, what do you need to know?
How does a property auction work?
If a seller decides to sell their property at auction, they set a reserve price – this is the minimum that they will accept. This is often confidential and the guide price is promoted. This is the price range expected for the property.
An important thing to understand when buying a property at auction, is that the auction is immediately legally binding. Once the bid has been accepted and the hammer has fallen, the winning bidder will be required to pay a 10% deposit and exchange contracts straight away. Time is definitely of the essence, so it is essential to have a residential conveyancing solicitor already in place and in the loop.
What will you need before attending and buying a property at auction?
If you are attending an auction and are seriously interested in purchasing a property via this route, then you will need to have several things in place to be able to put forward a winning bid. It can’t be an impulse purchase.
- Evidence of Identity
Before attending the auction you will need to make sure you have evidence of your identity and you should check with the auction house what they will require. This could be a passport, driving licence or similar.
- Finances – know your budget
As mentioned above, you will need to have your deposit ready to transfer as soon as your bid is successful. There may also be additional fees when buying a property at auction that must be paid to the auction house on the day. This could increase the final amount further.
- Mortgage lender requirements
If you require a mortgage to buy the property, you may find that the searches within the auction pack are not acceptable to your lender, or some additional surveys or searches are needed. It is best to have an understanding of this prior to auction so you can factor in extra costs.
As there is a tight timescale for completion, you will also need to make sure that any mortgage lender will be able to issue the mortgage offer in time. If the property requires works to be undertaken, this could mean that the mortgage offer has special conditions that need to be satisfied before the mortgage monies can be released. Sometimes lenders require reports (for example Mundic) and so this should be checked before the auction.
Please note that a mortgage offer in principle is not a mortgage offer and the lender will need to complete checks before they can issue the offer.
- Understanding the Auction Contract
When your bid is successful you have effectively exchanged contracts and created a contractual obligation to purchase the property on the date set for completion; normally 20 days from the auction.
There might be special conditions in the auction contract, for example you may have to reimburse your seller for the searches within the auction pack. When your bid is successful after buying a property at auction you will sign a memo detailing the purchase price and the solicitors’ details for the seller.
If you change your mind after successfully winning at the auction, then this would be a breach of contract and there will be financial penalties and costs to pay. These details must all be known and understood prior to the auction.
- Survey
You can arrange for a surveyor to assess the property prior to buying it at auction. The surveyor will visit the property and identify if there are any problems.
If there are any concerns raised, you can then obtain quotations for any potential works, allowing you to make an informed decision as to whether you want to bid for, and hopefully secure, the property.
All checks will need to take place prior to the auction date as once a bid has been accepted, you are legally bound to complete the transaction, regardless of survey results. You cannot renegotiate the purchase price based on a later survey or pull out.
- Legal advice
If you are considering buying a property at auction you should most certainly ask your residential conveyancing solicitor to review the auction pack and inform them of the date of the auction. They can then advise you on:
- What might be missing from the pack
- Whether any further searches are required
- Whether there are any issues with the title
- If further queries should be raised with the seller’s solicitor.
As the exchange of contracts takes place at the auction you will be bound by the information (or lack of information!) within the auction pack. The seller’s solicitor has no obligation to deal with any queries after the auction.
Once you have advice from your residential conveyancing solicitor you can then make an informed choice about proceeding to purchase the property if successful at the auction.
If you do not instruct a solicitor to review the auction pack prior to the auction, and a title problem is identified at a later date, you will not be able to go back to the seller to rectify it and you will not be able to renegotiate the price.
7. Buildings Insurance
It is definitely worth noting that your seller will have no obligation to have buildings insurance in place and, if your bid is successful, you will then inherit all of the risk. You therefore will need to arrange buildings insurance for the date of the auction.
If you are buying a property at auction, then we recommend instructing a conveyancing solicitor in Plymouth or residential conveyancer as soon as possible to review the auction pack. This is essential to protect any investments you make.
At GA Solicitors in Plymouth, our team of residential conveyancers and conveyancing solicitors have years of experience in buying properties, including those bought at auction. We can review auction packs and provide you with sage advice to help you make an informed and safe decision as to whether to progress with a purchase.
Should you need it, we can also recommend independent financial advisors and local surveyors to support you with your journey.
Call our specialist team today on 01752 203500. You can also email me directly via natalie.brenton@GASolicitors.com or email the enquiries team via enquiries@GAsolicitors.com.
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