Auction Guide
Introduction
Denton Clark is one of the few companies in Chester that offers the option of buying or selling property by auction in the Northwest and North Wales. The auction process has been demystified to an extent by recent television programmes. This guide is intended to further explain the processes involved to those contemplating buying or selling at auction.
Background
Since Henry Denton Clark founded the company in 1947, sales by auction have been an important part of its business. Historically, all types of agricultural property were sold by this method and also many country houses and cottages. Myles Denton Clark maintained the company’s auctioneering tradition followed by current directors, Ben Legget and Edward Clark.
Why Auction?
Many types of property lend themselves to sale by auction. All types of agricultural property are still commonly sold in this way. However, in recent times Denton Clark has developed a reputation for selling a range of property with potential for development, renovation or improvement. These include houses and cottages in need of work, single and multiple farm building conversions, building plots and larger areas of residential development land. In addition, many commercial and investment properties can also successfully be sold by auction.
Advantages
The principal advantage of a sale by auction is that much of the delay and frustration commonly associated with selling property by private treaty is avoided. Typically, the property will be marketed for a period of 4-5 weeks leading up to the auction and, if an acceptable bid is received, a legally binding contract is established on the fall of the hammer.
If there is likely to be strong competition between prospective buyers, an auction is an effective way of achieving the best possible price for a seller. At the same time, it is a transparent process where purchasers can be satisfied that they have been fairly treated and had the same opportunity as the next man to acquire the property.
Types of Property
A wide range of properties are now commonly offered for sale by auction including: -
- houses and cottages where the vendor has a particular reason for achieving a sale within a short timescale
- houses and cottages for renovation and improvement
- building plots
- commercial property
- investment property
- all types of development land
- single and multiple barns for conversion
- farms
- agricultural land
- paddocks
- sporting properties
Auctions are particularly suitable as a means of sale for the unusual, one-off property that is difficult to value. Over the years, Denton Clark has successfully sold by auction many weird and wonderful properties including an old engine shed, a disused tennis court, many parcels of woodland and fishing rights on rivers, lakes and reservoirs.
Selling at Auction
If you have a property that you believe is suitable for sale by auction or have a particular reason for going down the auction route, the first step is to contact Denton Clark who will arrange for an experienced Valuer and Auctioneer to visit you to discuss the merits and appropriateness of auction as a method of sale for your property.
Initial Arrangements
Once the decision has been made to sell by auction, we will agree our fees and other costs associated with the promotion and marketing of the property, all of which will be set out in writing in our Terms and Conditions. We will discuss the marketing with you and agree where the property will be advertised and for how long. We will also agree the arrangements for viewing which will generally depend upon the circumstances of each individual property.
You will be advised of a likely sale date and venue and usually your property will be one of a number of Lots to be offered. This encourages more prospective purchasers to attend the auction and creates a feeling of a busy auction room.
Reserve Price
We will discuss with you the likely sale price and agree a guide price to be quoted as part of the marketing campaign. Most properties offered for sale by auction are generally subject to a Reserve Price, a figure below which the property will not be sold. The anticipated Reserve Price will be discussed with you at an early stage but will not generally be fixed until closer to the auction when it will be possible to gauge the level of interest there is for your property.
Legal Requirements
At an early stage you will need to instruct your solicitor to prepare a Legal Pack, comprising the Contract together with Title documentation, any Special Conditions relevant to the property and Searches.
The successful sale of your property at the auction will result in a legally binding exchange of contracts and payment of a deposit, usually 10%. Completion will follow after a defined period, which will be set out in the contract, it will usually be 28 days although this can be varied to suit the circumstances of either the vendor or buyer. We will submit our account in respect of our fee and agreed marketing costs to you for approval, following which they will be paid by your solicitor out of the completion monies.
No Sale
We take great care in advising vendors on the suitability of their property for sale by auction as well as the price that can be realistically anticipated. As a result, we aim to achieve a high success rate. Nevertheless, sometimes a property does not attract the necessary level of interest. In the event of a satisfactory bid not being received, the property would be withdrawn. We would then discuss with you arrangements to offer the property for sale by private treaty with a view to achieving a sale within the shortest time possible.
Buying at Auction
Properties being offered for sale by auction will usually be advertised in the local Press, on our web site and on Primelocation.com and Rightmove.co.uk. On becoming aware of a property in which you are interested, there are a number of things you need to do to be in a position to bid at the auction.
Before Auction Day
Firstly, you should contact Denton Clark to obtain a copy of the Auction Catalogue or Sales Particulars. Details will also be available from our office as to the guide price and arrangements for viewing a property.
Preparing your Finances
If you are the successful bidder at the sale you will be required to sign the contract and pay the deposit, usually 10% of the purchase price. You will also be required to complete the sale and pay the balance of the purchase money on the agreed completion date, usually 28 days after the sale. Therefore, you need to ensure at an early stage that you have the necessary finance in place to enable you to comply with your contractual obligations.
Viewing the Property
You will need to inspect the property and undertake any investigations that you consider appropriate. You may wish to instruct a surveyor to carry out a building survey in which case we will be happy to make arrangements for them to have access to the property. If the property is in need of work, you may wish to arrange for a builder to visit in order to give you an idea of the cost of the requisite work.
Legal Pack
You will also need to inspect the Legal Pack or to instruct a solicitor to do so on your behalf. The legal documentation is usually available for inspection at our office a week or 10 days prior to the auction date. However, it is advisable to telephone the office to check on the availability of the Legal Pack before coming in to inspect it. We will attempt to answer any queries that you might have in relation to the legal documentation or alternatively put you in touch with the vendor’s solicitors.
Auction Day
Having arranged your finance as necessary and satisfied yourself as to the condition of the property and the contents of the Legal Pack, you should now be ready to bid at the auction. Check carefully the time and venue for the auction and ensure that you arrive in plenty of time. It is advisable to contact the auctioneers on the day of the sale to check that there have not been any last minute changes or alterations, properties can be withdrawn or sold prior to auction. At the auction listen carefully to the auctioneer’s opening remarks as there may well be important matters being announced relevant to the property that you intend to purchase. The auctioneer will then proceed to offer the property in accordance with the announced order of sale.
Most purchasers bid themselves. However, it is totally acceptable to appoint somebody to bid on your behalf. In such circumstances you should give them clear instructions as to how you wish them to bid and your limit.
The auctioneer has authority to conduct the auction sale and to determine the increments of bids. If you intend to bid it is advisable to position yourself where you will be visible to the auctioneer and to indicate your bid clearly, perhaps by raising your hand or waving a catalogue. Assuming a bid in excess of the Reserve Price has been made, the auctioneer will clearly indicate who has made the highest bid before dropping the hammer to conclude the sale.
Sucessful Bid
If you are the successful purchaser you will be asked to sign the contract and write a cheque for the deposit. You will be given a copy of the contract signed by, or on behalf of, the vendor, which you should give to your solicitor with instructions to complete the sale in accordance with the terms of the contract.
Money Laundering Regulations
Under the Money Laundering Regulations 2003 we are required to formally identify all vendors and, in the case of auctions, also all buyers. Accordingly, you should bring to the auction your passport or photo driving licence together with a recent (within the last 3 months) utility bill, bank statement or Local Authority Council Tax bill.
Why Denton Clark
- Denton Clark has been selling property by auction since 1947 and therefore has many years experience of what constitutes a good auction property.
- All of the directors of the company are Chartered Surveyors and consequently you can rely on sound independent advice.
- We are well known for selling a wide range of properties by auction and therefore purchasers regularly scan our advertisements and web site looking for these types of properties.
- As a local company we have a better understanding of local market conditions than the regional or national firms of auctioneers.