“Going once, going twice, sold!” – A step by step guide on buying commercial property at auction
This week, we will be looking at buying and selling commercial property at Auction in the UK.
In this article we discuss the processes of buying commercial property at auction.
Auction provides potential purchasers an easier and quicker process, than the more conventional channels, of buying property. For this reason, it is also crucial you take the necessary steps in ensuring the property is suitable for you.
Most auctions will publish in advance the plots of land they hold. It is advisable to visit the plots in advance of the auction taking specialists like builders, architects and engineers to spot any potential problems you may face upon exchange of the land.
Having an agent or solicitor at this stage is highly advisable if you are not experienced in commercial property matters.
Ensure that you check if you will need planning permission for the use of the building. Planning permission is not only required for external changes, you must seek permission for even changing the use of a commercial property. Using a solicitor as this stage of your transaction is advisable in seeking such confirmations.
There’s no going back from “sold!”
In case you were not aware, once the auctioneer declares “sold” you are legally obliged to follow through with the sale.
A successful bid on commercial property matters is usually followed by providing a deposit (usually a fixed percentage of the purchase price).
If you cannot proceed with your sale after this, you risk losing your deposit and you risk being sued for breach of contract. Be absolutely sure you want and can afford the bid you make.
If you identify a property you’re sure you want and don’t want to risk going to auction you can submit an offer prior to the auction taking the place.
The Auctioneer will take the offer, presented in writing, to the Seller and seek confirmation if they wish to accept. If the offer is accepted contracts must be exchanged and deposit must be paid immediately.
“Do I hear fifty thousand?”
If the property you want still proceeds to auction, you will have to engage in a series of bids to secure the deal.
You don’t have to attend the auction itself in person. A representative can go on your behalf or you can place bids via telephone or internet.
Be sure you check all the documents provided regarding the property. An addendum might also be attached which prescribes any changes that may have occurred.
Congratulations, you have just purchased commercial property.
You will pay the deposit today and exchange contracts and pay the remainder by the completion date.
Completion should occur within four-weeks as title checks, and searches were all conducted prior to the auction as part of your research and consulting commercial property solicitors to assist with your purchase.
At Carter Bond Solicitors, we have first hand experience in assisting clients who have purchased commercial property through an auction. Talk to us today and find out how we can help you.
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