Purchase at auction - additional charges to be aware of
When purchasing a property at auction, great care must be taken to ensure you are aware of the conditions set out within the contract and auction pack. We would always advise that you instruct a solicitor to carry out these checks on your behalf prior to bidding.
A non-refundable 10% deposit is usually paid to the agent at the auction (depending on the type of auction being held) to secure the property, but these are some of the additional charges which we often see in the small print:
RESERVATION FEE – this is a non-refundable fee paid directly to the agent if the sale is by the Modern Method of Auction. Please note that this is not a deposit and does not form part of the purchase price although will be classed as consideration for Stamp Duty purposes.
SEARCH FEES – The seller may require you to reimburse them the search fees in the region of £100.00 - £300.00 or more.
LEGAL FEES & AGENT’S FEE – You may find that there is a clause to allow the seller to recoup their own legal fees and agent’s selling fees from you, in addition to paying your own solicitor. Such fees could vary massively and would depend upon the sale price, location of the property, and complexity of the title amongst other factors.
BUYER’S PREMIUM – In addition to those fees listed above sellers can claim an additional buyer’s premium (a percentage of the sale price or a fixed sum) which effectively increases the price paid and which will also attract Stamp Duty, if applicable.
This is not an exhaustive list and there may be other fees referred to in the contract and so it is vital to check each clause carefully or, ideally, instruct a solicitor to do so on your behalf before you make any commitment.
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