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In this guide, we break down 10 essential auction terms that every first-time buyer must understand before bidding. Whether you're a buy-to-let investor or looking for a fixer-upper, this knowledge will help you navigate the process with confidence.
Tip: Treat the guide price as a starting point, not a guarantee—research recent sales in the area to estimate a realistic final price.
The reserve price is the minimum amount the seller will accept. If bidding does not reach this figure, the property won't be sold.
Example: If a property has a guide price of £150,000, the reserve price might be £160,000. If the bidding stops at £155,000, the property remains unsold.
A legal pack contains essential documents for the property, including:
Title deeds: Proving ownership.
Searches: Checking for issues (e.g., flood risk, planning restrictions).
Leases (if leasehold): Lease terms & costs.
Special Conditions of Sale: Extra terms set by the seller.
Tip: Always have a solicitor review the legal pack before bidding. Hidden legal issues can lead to unexpected costs or complications.
Example: If a property sells for £200,000 with a 2% buyer’s premium, you’ll need to pay an extra £4,000 on top of the purchase price.
Unlike private property sales, where contracts take weeks to finalise, at auction, the exchange of contracts happens immediately when the hammer falls.
Tip: Ensure you have your finances ready, as you will be legally committed to the purchase the moment bidding ends.
The completion date is when you pay the remaining balance and officially take ownership. Standard auction terms require completion within 28 days, though some auction houses allow 56 days for certain properties.
Tip: If you’re using finance, ensure your lender can process the loan before the completion deadline to avoid penalties.
Unconditional Auction: Contracts exchange immediately with a 10% deposit required on the day.
Conditional Auction: The highest bidder secures an exclusivity period (often 28 days) to arrange finance and complete due diligence.
Tip: Bridging loans can be a useful short-term funding solution for unconditional auctions if you don’t have the full amount available upfront.
These are additional terms set by the seller, including:
Tip: Always check the special conditions before bidding—unexpected costs could make the deal far less attractive.
A non-mortgageable property is one that traditional lenders refuse to finance, often due to issues like:
No kitchen or bathroom (deemed uninhabitable).
Structural damage (e.g., subsidence).
Short lease terms (e.g., under 60 years).
Solution: Use a bridging loan to buy the property, then refinance once repairs are completed. Use our Bridging Loan Calculator to check affordability.
Stamp Duty is a tax on property purchases in England and Northern Ireland. The amount depends on:
Use our Stamp Duty Calculator to estimate your SDLT before bidding!
Thinking of buying at auction? Get expert guidance and tailored finance solutions from Auction Finance.
(C) 2025 Auction Finance is a trading name of Mortgage Knight Ltd