Glossary of Terms
The jargon made simple
To help you understand the terms used around auction sales, we've compiled a simple glossary of common terms with an explanation behind each one.
When a property is sold in this way a 10% deposit is paid immediately and contracts are exchanged immediately. Completion normally takes place 28 days later. This is the fastest and most secure method of sale.
After the acceptance of an offer or at the close of the auction, the buyer must sign the reservation form and place a non-refundable reservation deposit to secure the property. The buyer is then given 28 days to exchange contracts and a further 28 days to complete the purchase. The method is suited to those needing longer timeframes.
Every property is advertised with a starting bid, which is the recommended level at which the bidding should open. It must not be relied upon by potential buyers as a valuation, as in most cases the reserve is above this level. Both the reserve and start bid are subject to change.
This is the minimum price that a seller is willing to accept for a subject property. This is a figure that the property will not be sold for less than. Reserve prices are not published; this is a private agreement between the vendor and the auctioneer. Both the reserve and starting bid can be subject to change.
Potential buyers can arrange to view the property, arrange a survey and have their solicitor check the legal documents as normal. If they are interested in a property they can put a bid forward and if accepted they pay a non-refundable Deposit which gives them exclusive rights to purchase the property.
If a property has been entered to a public auction event at one of our regional auctions the online bidding facility is disabled. If you wish to place a pre auction offer you will need to speak with a member of the auction team who will explain the process to you. The vendor can consider offers prior to the public auction, but this is at their discretion to do so.
The reservation form is an agreement is purchase the property at the price agreed and sets out the terms and conditions which need to be met by the buyer. The sale will not be instructed and the Memorandum of Sale will not be sent out until the reservation form is signed.
Exchange of Contracts
Here, the buyer signs the contract for sale and then the same contract is counter signed by the seller. This is the point at which both parties are legally obliged to complete the transaction. The purchase is not complete at this point, but there is a legal obligation for the purchaser to buy and the vendor to sell.
This is when the purchase becomes final: the purchase price is paid in full by the buyer's solicitor and received by the seller's solicitor. Completion can take place at the same time as the exchange of contracts (see above) but is usually a week or so later. The seller must move out of the property on this date and release the keys to the buyer, who may move into the property.
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