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.
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.
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.
