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Will I lose my deposit if I pull out of a property auction purchase?

It’s easy to allow your emotions to influence your auction decision.
If the bids are too excessive Keep your budget in your head. There’s always the next time.

You are bound to pay by the top bid at the end of the auction.
3 top tips for auction day

1. Prepare the necessary paperwork

If you are planning to make a bid in an auction, you need to have an ID photo and proof of residency along with you.

These documents may be required if the auction is online.

Your AIP is required in the event that you buy with a mortgage. If you’re a cash-buyer, you’ll need proof that you’re able to afford the 10 percent deposit.

2. Make sure you stick to your bidding plans and stick to your budget

It is important to have a clearly defined bidding strategy and an idea of your maximum bid.

If the bids are more expensive then be ready to leave.

3. If you don’t get the chance to purchase a house Don’t give up hope.

It’s better to be able to skip out instead of blowing your budget.

Don’t lose heart. You could find a better property.

What should I do now that I’ve won an auction for my house?

Congratulations! Now it’s time to pay for the deposit or reservation fee. Let’s start with the legal side.

1. Request a survey about your home

If you purchased the home at a modern auction, now’s the time to get an inspection.

A home survey is a way to make sure everything is in order. There are a variety of surveys.

While surveys aren’t mandatory to be done by law, it can aid in identifying any issues.

You may still opt to cancel auctions if you purchased through the modern auction process.

2. Secure your mortgage

If you’re getting a mortgage, your lender will have to conduct a valuation in order to check the home is worth what you’re planning to purchase it.

In the appraisal the mortgage lender will verify whether the kitchen is functional and bathroom. They’ll also ensure that the house is in a liveable condition.

If they’re pleased with their home You should be able to get your mortgage offer through within a short time.

3. Make sure you are covered by insurance

After you exchanged contracts, the property is yours.

Find building insurance right away. This will safeguard the bricks, mortar and the structure from damage like flooding or fire.

What happens to my money if the auction is cancelled?

If you choose to cancel an auction purchase, you will be responsible for part of your losses. How much you’ll lose will be determined by the auction method you purchased through.

You could also be charged hefty administrative costs.

Buyers tend to back out if they find something wrong in the property’s condition or the legal side of things. There may be legal notices, or structural issues that could affect buyers plans.
The method of the past

Contracts are exchanged when the hammer hits an auction that is traditional.

That means you’re legally obligated to make the sale. It is possible to lose your deposit of 10% if you choose to cancel the purchase.
Modern Method

It’s much easier to get out of a modern auction however you’ll make a loss.

You’ll forfeit your 5% reservation fees when you cancel your reservation within 28 days of the date of exchange.

You’ll forfeit your reservation fee when you cancel after you’ve exchanged contracts.

If the seller opts to pull out of an auction, you’ll receive your deposit and reservation fee back.
What are the pros and disadvantages of buying an auction house?


You might get an amazing deal

Auctions are an excellent way to locate a project for renovation or a home with a low value.

It’s transparent

It is easy to determine the bidding of other bidders on the item, and it’s less likely you’ll be taken advantage of by a seller changing their opinion.

You’re playing on the same level

You don’t have to rush to present your offer or convince an agent you are the right buyer.

It’s fast

The entire house auctions near me process could be completed in just a couple of months. There are fewer delays when compared with other sales strategies.

A mortgage can be used to purchase a home

A growing number of banks and building societies are prepared to loan money for auction purchases these days and especially with the new auction method.


It’s a bit uncertain

There’s no guarantee you’ll be the highest bidder for the property you like.

Pay quickly

You pay a substantial amount of money at auction, and the rest soon after.

You are locked in

If you change your mind it’s hard to cancel an auction purchase. It is possible to lose a significant amount of money.

It’s emotional

Bidding at an auction can be a rollercoaster of emotions.

Do you want to purchase a home through an auction?

It is more risky to purchase a house via auction than to purchase an item through an estate agency.

It’s not possible to assure that you’ll be able to purchase the home or that your budget will be satisfied. It’s crucial to make sure every duck in the water is in place before you make a decision. If you do not, it could cost you a lot of money.

But, if you research the market there are many advantages of purchasing a house at auction.

This is a quick and simple method of purchasing a property. There are many hidden treasures available for sale through auctions, and you might find the renovation project you’ve been searching for.

The more you are aware of the property you’re interested in, the more informed you’ll be. Before you make a bid take your time researching the area and its house prices.

Review the auction procedure and rules. You should be familiar with the auction’s terms and conditions as well as the responsibilities you will face should the property be won.

And don’t do the task on your own. Get the experts to assist. A solicitor, surveyor and estate agent can make buying a house at auction much easier.