Buying at Auction

Buying at Auction

The way in which we buy products and services is changing and more people are using online and offline auctions to make a purchase. From property to antiques and everyday items, what rights do you have as a consumer buying at auction?

Buying at Auction

This guide explains.

Auctions are held for many different reasons but before one can take place, the company or auction house running the auction must follow a series of steps. Prior to the event, auctions should be advertised so that any interested parties know when the auction is taking place.

Advertising materials should include the name of the auctioneer and their address. Whatever is being auctioned should be in a catalogue and this should be made available in advance of the auction. The catalogue could contain anything from antiques to property and made available for viewing by anyone who is interested in participating in the auction.

Online, phone or postal auctions may also take place. When certain auctions are carried out the process is slightly more complex and the specific details for these auctions (from a legal perspective) are outlined below.


More people are buying property at auction because it is a convenient way to invest, start a new project or simply get onto the property ladder. Buying property is a minefield, but even more so when you make an auction purchase.

When you buy a property at an auction it is, essentially, sold as seen and the property you are buying may have serious defects that may not be immediately apparent. In some cases, the seller will simply hope that prospective buyers don’t carry out their own due diligence and these defects don’t come to light until the transaction is complete.

It is therefore very important that whey you buy property at auction you should approach it with extreme caution. Not all auction properties contain serious defects, some are simply sold because the vendor wants a quick sale.

The process of buying property at auction is slightly different to a normal house purchase. On the fall of the hammer in the auction room, contracts are exchanged, and the seller is legally obliged to sell and the buyer legally obliged to buy. There are a few situations however when the seller can withdraw from the contract.

Once the contracts have been exchanged, the transaction must be complete within a further 14 to 28 days. When you buy a property at auction you must ensure that you have the funds available on the day of the auction in addition to any fees and/or deposit or buyers’ premium.

If you fail to have the funds in place this can affect or delay completion and could result in further costs. When buying commercial property, the Standard Commercial Property Conditions apply in this instance which provide guidance on what happens if the transaction is defaulted or delayed.

The Standard Commercial Property Conditions are applicable to all commercial transactions and provide conditions around insurance, delays in completion, compensation rights and VAT to name a few.

When a property is prepared for auction, an auction pack will be created by the auction house. This is a set of documents that relate to the property including things such as the title, maps of the property and any other details that may be relevant to the sale such as guarantees and certificates where they exist.

This legal pack must be made available to buyers before the auction so they can review its contents, seek legal advice and determine whether the property is a good fit for them. A prudent buyer would therefore be wise to engage a solicitor to review this legal pack before they make a bid in the auction.

A solicitor may identify problems with searches, a defect in the title or some other onerous issue that may affect your decision to buy. Once the hammer falls on the auction day and you are committed to the purchase, the seller is under no obligation to put right any defects in the property.

Business Auctions

Similar to a property purchase, a potential buyer of a business would need to instruct a solicitor to undertake the necessary research to make sure that the business was sound from a legal perspective.

When a business auction takes place, the seller will need to generate interest in the business and send out documents such as a sales memorandum and other important business documents in what is referred to as the sales pack. Interested bidders will then review the sales particulars and undertake their own research into the business.

A second round of bidding then takes place where contracts are drawn up and prospective buyers find out even more about the business. This is then followed by a further stage of negotiations.


When anything is auctioned, the auctioneer has specific liability to a buyer in relation to:

  • The contract of sale
  • Liability as a bailee
  • Misrepresentation
  • Anything that could be classed as fraud or breach of warranty of authority

Criminal Sanctions

Sometimes when auctions take place, things can and do go wrong. Primarily this relates to something that has been wrongly described. This can range from the ordinary such as land to the extraordinary such as wild birds or rare items.

Auctioneers must comply with strict rules in relation to how auctions are conducted. For example, an auctioneer cannot be misleading by accepting bids which haven’t been made to raise the price of an item. If it is found that this did happen you could have a claim in relation to the deposit that you paid and any interest this may have accrued. If something like this does occur, claims for fraud can be made and the innocent party can request rescission of the contract.

If an auctioneer is found to be participating in any unfair or unacceptable conduct, they can be prevented from holding auctions for a specific amount of time in line with the regulations under the Auctions (Bidding Agreements) Act 1927.

About the Author
This article was written by a member of the Expert Answers team and posted by Lloyd Barrett, Admin & Customer Services Manager for online advice service Expert Answers. Expert Answers provides legal advice to users in the UK who post a question on their secure platform.

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