Auction Jargon – What does it all mean?

 

Auctions can offer a fantastic opportunity to both buyers and sellers. Sale by Auction is fast, transparent and offers certainty of success as no-one can take the property away from you at the fall of the hammer. If you have never bought or sold at Auction before though, some of the jargon may leave you trying to guess what it all means.

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To help you understand the jargon we bring you our handy guide to Auction jargon and what it all means!

Addendum
An addendum is an amendment or addition that has been made to the Auction or a particular lot usually since the catalogue has been printed. An addendum sheet is usually available in a supplement to the catalogue on the day of the Auction and details any changes to lots, revised guide prices, details of any additional lots or late entries, withdrawn lots or even lots sold prior. Any late changes to the special conditions may also be included.

Auction Sale
A public sale in which property is sold to the highest bidder.

Auctioneer
The person who conducts an auction. The auctioneer introduces each lot offered for sale, acknowledges bids, and announces whether lots are sold or unsold and their final bid prices

Bid
The offer to buy property at a specific price.

Buyers Admin Fee
There is a buyers admin fee to pay when you purchase a property at Auction. This is usually 0.5% of the purchase price subject to a minimum of £500 plus VAT.

Completion
The date by which the sale must be finalised. The completion deadline is set at exchange of contracts and failure to complete by this date can result in purchasers facing penalties and potentially loosing their deposit.

Continuing tenancy income
Many investment properties are now being sold by Auction, without vacant possession being obtained in advance. By continuing the tenancy the vendor will continue to receive rent until completion date, and the purchaser will start receiving an income from that date onwards. Auction House sells a wide variety of occupied properties – Regulated Tenancies, Houses in Multiple Occupation, Assured Shortholds and others that are let commercially.

Deposit
Your deposit is payable on exchange of contracts. This is 10% of the purchase price subject to a minimum of £3,000. Payments can be made by cheque, credit or debit card. For any bank transfers you must speak to Auction House ahead of the Auction Day.

Exchange Contracts
The successful bidder at the fall of the hammer in the auction room will sign and exchange legally binding contracts in the Auction room. As the contact is legally binding at exchange failure to complete could result in penalties or even loss of deposit for the buyer.

Guide price
A guide price gives an indication of the price that the property is expected to sell for and what the vendor is hoping to achieve.

Guide prices are for information only and should not be relied on as an indication of reserve price, or representing professional valuations for any purpose. Purchasers are deemed to have relied on their own knowledge or obtained the independent, professional advice of others.

Legal pack
The vendor’s solicitors prepares a legal pack containing copies of all the legal papers that you and your solicitor are likely to need to make an informed decision about your lot. The pack should include (where applicable) copies of: special conditions of sale, title deeds, leases, office copy entries, searches, replies to pre-contract enquiries.

All legal packs will be available for inspection at the auction room. You must be aware that you buy subject to all documentation and terms of contract whether or not you have read them.

Lot
Each separate property described in the catalogue or (as the case may be) the property that the seller has agreed to sell and the buyer to buy

Open House Viewings
Viewing dates will be advertised ahead of each Auction. There is usually an open house viewing so you can just attend within the designated viewing time without booking.

Proxy bid
The auctioneers can undertake bidding on behalf of buyers unable to attend the auction in person. The buyers must contact the auction house prior to the auction to obtain an official, proxy bidding form. This must then be returned to the auction house with a deposit cheque within the time specified by the auctioneers. The buyer writes the maximum amount they will bid to on the form and the auctioneers will bid on behalf of the buyer, up to, but not beyond, the stated price.

Reserve
A reserve price is the lowest price the vendor will accept. This is agreed between the vendor and the Auctioneer. Most properties entered into the auction have a reserve price. This is confidential and not disclosed to any interested parties.

Telephone bid
A telephone bid, made by a member of staff from the auction house. The staff member telephones the client from the salesroom to bid on particular lots and relays the client’s bids to the auctioneer during the bidding on those lots.

Tenancies
Contracts to occupy or lease the property subject to rent. A lot may be sold subject to existing tenancy agreements.

Withdrawal
Failure to reach the reserve price or insufficient bidding. The auctioneer will withdraw the property from the auction.

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Contact us at Auction House Manchester if you have any further questions about Auction Sales on 0161 925 3254 or visit our Website.

 

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