Sally Smith, director and auctioneer of Auction House Coventry & Warwickshire, shares her secret tips to make you a property auction pro.

More and more properties are going under the hammer, and sales are on the up. But buyer bravado without the know-how means some people are getting tripped up.

1. Not understanding the legal binds

According to Smith, the biggest buyer blunder is not understanding the legal commitment.

“I think this mistake is increasing because auctions are becoming a lot more popular and user-friendly,” she explains. “Thanks to the fantastic influence of things such as BBC’s Homes Under The Hammer, auctions are now seen as being within purchasers’ reach; they understand it a little bit more.”

However, while you may be lacking the nerves, you could be missing the full legal picture – and the penalties if you haven’t done your research.

To dodge this pitfall, you need to know what you’re saying ‘yes’ to, including the sales timeline. You also need to know the costs that come with not going through with the deal.

Once the hammer comes down, you’re signing up to a legally binding contract. This comes with consequences if broken.

“If you legally commit to purchase a property at auction and, for whatever reason, you’re not able to complete, then the biggest consequence is that you will lose your deposit,” says Smith. “The seller will then reserve the right to pursue you for breach of contract and any costs that they have incurred.

“In addition, if the property is resold for a lower amount, then the seller has the right to sue you for the difference between what you originally offered and what the property was eventually sold for.”

2. Not reading the legal pack

The second biggest slip-up is not reading the legal pack.

Every property sold at auction has a legal pack, which is available to download and review before the auction. This document contains crucial information about the lot, timelines and fees linked with the purchase.

Smith points out that while auctioneers are a great tool for learning about a property, they’re not legal experts. “We have a responsibility to our buyers to make sure that they aware of what they’re purchasing, but we don’t interpret a legal pack.

“This makes it important for you to not only read the legal pack yourself but have a conversation with a solicitor too.”

3. Not having the money

Funds must be available before you bid. If you’re buying with cash, you need to be able to get your hands on it. And if you have to withdraw it from an account, you should factor in the notice period.

If you’re borrowing the money, you ought to be totally sure your lender is going to pay up. Smith explains: “We deal with a lot of buyers who have an agreement in principle, and we spend a lot of time explaining that it’s not actually an indication that your finance is in place. It is literally an agreement ‘in principle’, which means it is subject to checks, verifications and all sorts of other hoops and hurdles. Having further conversations with your mortgage broker or bank are therefore absolutely crucial.”

4. Not doing your research

“It sounds like a very obvious mistake, but we find that we’re having more and more conversations with buyers so that they understand what exactly it is that they’re purchasing. Some buyers make the mistake of not doing their research beforehand and then only catch up on it after the sale,” says Smith.

She also suggests that you talk to the auctioneers. “We may be able to give you all sorts of additional information that perhaps isn’t in the marketing or even in the legal pack,” she says. “It’s also very important to view the property yourself and have a closer look at anything that catches your eye.”

5. Not being auction-ready

Don’t forget to jot down the date and check that you are registered and authorised to bid.

“It’s the same as getting ready for a holiday. You wouldn’t set off without having your passport or your money. But I often deal with buyers who admit that they have forgotten, or who ring up the day after the auction and reveal that they would have gone higher than the winning bid. But once a property is sold, it’s sold.”