Property Auction GlossaryAddendum The addendum is the document that is printed on the actual day of the auction, which contains all the corrections, changes and additions made to the details of the catalogue up to that point. It is handed out to all the people in the auction room before the auction commences. This document is very important to peruse before you begin bidding, as you ought to be informed of any significant changes that could have been made to your property. These amendments are usually compiled right up until the auction day, so the document is entirely up-to-date when it reaches your hands. Of course, the most recent copy is available from the auction house office before the auction begins, but it is called the Erratum before the auction day. In addition, the addendum forms part of the contract of sale, as all the final conditions of sale are included in the document. Completion This refers to the point at which the property becomes officially yours and you can have access to the keys to the property. Usually this occurs 28 days after the transaction was completed at the auction house and there was an exchange of contracts. This tends to be arranged between the vendor's solicitor and your own solicitor. At this point in the process you will be asked to supply any outstanding funds for the property, which is usually the remaining 90% of the purchase price. If there are any variations or changes to these terms the auctioneer will make an announcement. Erratum The erratum is a document that contains a list of the changes and corrections to the catalogue that occur up to the actual auction day. On the day of the auction though, this document, with the most up-to-date changes, is called the addendum. Copies of the addendum are always available in the auction room for participants to pick up a copy of. If you want a copy of the erratum you can pick up a copy any day before the auction from the auction house office. Exchange of Contracts At the fall of the hammer the purchaser is in contract and they are legally required to buy the property they bid on. This is when a non-refundable deposit is required to initiate the purchase, and although the property is not yours at this point you do have a legal obligation to purchase the property, and for the vendor to sell. This is also when you should arrange for property insurance. Guide Price Guide prices indicate the vendor's minimum expectations of a property and are published in the auction house catalogue. They are not reserve prices and are to be used only for guidance - they can also change as the marketing period goes along. Guide prices are often exceeded once bidding begins. Legal Enquiries If you have any legal questions or queries you can contact the vendor's solicitor, whose name, address and telephone number can be found in the catalogue. Legal Pack A legal pack is prepared by the vendor's solicitor, and contains all the legal papers that you and your solicitor are in need of in order to make an informed decision regarding the property. Usually the pack includes: special conditions of sale, title deeds, leases, office copy entries, searches, and replies to pre contract enquiries. You can usually get a copy of a legal pack from the auction house's office for a small fee. Not all the papers may be available right away, but you will probably be able to get any of the papers that have already been provided by the vendor's solicitor. If you can't get the information you need through this avenue you have the opportunity to contact the vendor's solicitor directly to get the information you need. If the legal pack is not received until a later time, the auction house can take your request for one and will send it to you as soon as it becomes available. You can also peruse the legal pack in the auction room. Memorandum of Sale When you purchase a property at auction the memorandum of sale is the contract that is exchanged between you and the auction house, which is acting on the vendor's behalf. This contract is governed by the standard conditions of sale, as well as the general and special conditions of sale, along with any other amendments attached to it. Usually you can find an example of the memorandum of sale by looking at the back of most catalogues. Proxy Bidding/Telephone Bidding You can bid on an auction by telephone or though writing if you are unable to attend the auction, but this needs to be arranged in advance. Also, you must have your deposit cheque ready. You can get a proxy bidding form at the back of the catalogue so you can register to bid. Reserve Price The reserve price is the minimum price that the vendor has set as an acceptable sale price for his or her lot. Reserve prices tend not to be published and are not set by the vendor until a few days before the auction anyway. Special Conditions of Sale When a lot is up for auction it is subject to the Notices and General Conditions of Sale that you can find in the catalogue. These are general conditions that are attached to the lot, but in addition there are usually extra terms drafted by the vendor's solicitor that apply to that particular lot. These are called the Special Conditions. You can't find these printed in the catalogue but you can get a copy for free from the auction house or the vendor's solicitor if you request it, and it forms part of the Contract of Sale. Ensure that you make all your legal enquiries and are up-to-date on any conditions, including those listed in the addendum, before you bid on a property. Valuations and Surveys When you obtain a valuation, there are different reports you can receive. For example, the valuation report is different from the house buyer's report because it is usually used to advise the lender about the value of the property. The report will probably reveal any drastic faults on the premises, but it is not the same as a structural report. A full structural survey goes into detail about the fabric and structure of a property. It can report on amenities as well as structural defects such as settlements, dampness, and general condition. When the report is made, it is put together after easily accessible parts of the property are surveyed. Note that the surveyor will not move furniture, lift floorboards, check plumbing or electrics unless they are asked to do so. The house buyer's report gives you both a valuation and a structural assessment of the property. It does not contain as many details as a structural report, but it can alert you to potential as well as actual problems.
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