ASK ROSS: Buying a property can take many forms and carry a number of risks. This month Ross explains auction procedures, new build purchases and what it means to be gazumped…
Our eminent residential property expert, Ross Ward, answers your questions about moving home. If you have a query about buying or selling, email marketing@tayloremmet.co.uk
What is the procedure for buying a property at auction?
When a property is sold at auction, your solicitor will want to check the contract, the deeds and any conditions relating to the terms of the sale. These particulars will usually be available for inspection seven days before the auction.
Provided there is sufficient time, your solicitor will conduct the usual searches and enquiries. It is also prudent to have a survey carried out and finance in place prior to the auction. If you are successful, you will be asked to sign a contract immediately and pay a 10% deposit. Completion of the purchase normally takes place 28 days later, unless otherwise stated in the contract and at this stage you will have to pay the remaining 90%.
You may want to attend the auction yourself, but if you are at all nervous, your solicitor can do this on your behalf. To ensure you do not bid more than you can afford, it is wise to go with a fixed price in mind.
I am in the process of buying a new property and the builder won’t commit to a completion date. Is there anything I can do?
If you are buying a property that is still under construction, it may not be possible to agree a definite completion date at the time of exchange, as the builder will not be able to guarantee the work will be finished.
In many new build contracts an agreement is reached whereby completion takes place within a certain number of days after work is finished. This is typically 14 days from when the property is physically ready.
This type of arrangement can often make it difficult to synchronise a completion date with a chain unless similar conditions are imposed on everyone else. It may be that you have to conclude your dependant sale first and move into temporary accommodation until your new home is ready or persuade your buyer to work with the same floating date.
When you know completion is to take place, you will need to arrange for a final inspection of the property to make sure you are satisfied with the work. If you have taken out a mortgage, it is likely your lender will also want to carry out a final survey/valuation.
Your solicitor may be able to negotiate a cut-off date, which is usually around a month after the estimated completion to ensure you are not strung along indefinitely by the builder.
What is the difference between gazumping and gazundering?
If you agree a sale price with the owner of a property and then he or she accepts a higher offer before contracts have been exchanged, you have been gazumped.
This usually occurs when property prices are rising rapidly, as the vendor is legally entitled to withdraw from a sale at any time before the date of exchange.
Estate agents are obliged to pass all information onto their clients, which means if a higher offer is made, they must inform the vendor for whom they are acting, who in turn, must decide how to proceed. This often leads to estate agents being blamed for gazumping.
Gazundering is the opposite and happens when the buyer offers a lower price than originally agreed just before contracts are exchanged, in the hope the vendor will accept it rather than lose the sale.
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