reading legal packs for buying at auction.(5 Posts)
What should I look out for when reading the legal pack?
I am thinking about buying a freehold terraced house. at auction.
would a solicitor be necessary? how much would that be? and what would they tell me?
Bit nervous to be honest.... never even been to an auction!
Yes, it is really important. I would be looking for issues on the title such as covenants or imperfect title which could affect the value or ability to borrow against the property in future. When the hammer goes down, you have exchanged contracts so will lose the deposit and buyers premium if you don't complete.
We bought a development site 3 years ago and I also checked the planning permission on the site (I'm a solicitor) but I also paid to have the title checked properly.
You really should read the legal pack and get a survey done. As the PP has said, you're exchanging contracts and the only way you can back out after that is by losing you 10% deposit. Most people who buy without legal/surveying advice at auctions are experienced developers who take a calculated risk. If you do without a surveyor and lawyer, you've got a chance that there aren't any issues but you've lost you chance to make a decision whether to go ahead without losing your deposit. That's problem with auctions - you have to do some of the initial legwork without knowing whether you've got any chance of getting the property but on the flip side, once the hammer goes down, you know you've got it.
the property we are interested in was bought by a company in dec 2016 - now up for auction.
I have had a look at the legal pack. and it does seem comprehensive and straight forward. We bought our own house recently and everything looks remarkably similar.
there are a bunch of questions they ask - like access rights - freehold - and some survey questions- like planning applications nearby - water drains that sort of thing.
had a read of the survey for environmental/ flood/ contaminated land/ mining reports etc
how much would we expect to pay for a solicitor to have a read?
I suppose any solicitor would do?
There are reasons why properties are sold at auction and quite often it is that there is something wrong with them.
I'm a solicitor but would not skip getting the right advice.
The legal pack may look straightforward to you, but presumably you haven't checked the original conveyances for encumbrances?
If you're happy to take a risk then that's fine but there can be issues. For example, the person who bought the land adjacent to our bought at the same auction as we did. He thought that he was buying with planning permission, or that's what the particulars said. He didn't check and the permission had expired, cue a long, complex, expensive and worrying process.
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