The hammer comes down and there are about four good seconds. Then the clerk wants your details, your ten per cent, and a completion date you have not thought about nearly hard enough.
An auction purchase is the one mainstream way to buy property where you are legally committed before any lender has said yes. Contracts exchange on the fall of the hammer. Completion is usually twenty-eight days later, some lots run to fifty-six, and the number in the legal pack is the one that binds you.
Miss it and you do not simply lose the deal. The seller serves a notice to complete, which buys you ten working days at a penalty rate of interest. If you still cannot complete, they rescind the contract, keep your ten per cent, resell the property, and can pursue you for any shortfall on the resale. Ten working days is not a rescue plan. It is the length of time it takes to discover you have no options.
The auction enquiries that reach us tend to arrive the same way: after the hammer, with the clock already running. This is written from that side of it.
Twenty-eight days is not twenty-eight days
It sounds like a month. It is closer to fifteen useful working days once you take out the weekends, the two or three days the memorandum of sale and contract papers spend moving between solicitors, and the fact that your solicitor has other clients who also believe their matter is the urgent one.
Into those fifteen days you need to fit a lender’s credit decision, a physical valuation, a legal report on title, searches or the insurance that stands in for them, identity and source-of-funds checks, a facility agreement drafted and signed, and a lender’s solicitor satisfied enough to release the money. Any one of those running a week over eats a third of what you have left.
The buyers who complete comfortably are not quicker than you. They started before the auction. I have never met one who regretted it.
The three weeks nearly everybody wastes
The legal pack goes up before the auction. So do the guide price, the address, the tenancy position and the title.
That is everything a lender needs to give you a real answer. It is also everything your solicitor needs to spot the ground rent review, the missing FENSA certificate, the flying freehold, the absent freeholder, the short lease that makes the whole lot unmortgageable.
An auction solicitor I work with says the same thing to every client, and it has never once been wrong: everything I find on day fourteen was sitting in the pack on day minus seven.
You can have credit-backed terms and a legal read of the pack before you raise your hand. It costs you a solicitor’s fee on a lot you might not win. Set that against a lost deposit and it is not a close call.
So: indicative terms and a legal review of the pack before you bid, not after you win. Everything else in this article is a consequence of that one decision.
An agreement in principle is not money
The most expensive misunderstanding I see is treating an indication as a done deal. Between an indication and funds in your solicitor’s client account sit full credit approval, a satisfactory valuation, a solicitor’s undertaking and the lender’s own legal sign-off. Every one of them is a place the deal can stall.
A valuation booked for day twelve and delivered on day nineteen leaves nobody any room. And a valuer who comes in below what you paid, which happens at auction because auction prices are sometimes just what two determined people did on a Tuesday, resets your loan and your cash requirement with a fortnight to go.
Which is why I ask one question that sounds unhelpful before anyone bids: what is your plan if the valuation comes in ten per cent light? If the answer is that there is not one, the bid is too high.
What actually goes slow
Rarely the lender, in my experience. The delays cluster in four places.
Searches. Local authority searches take weeks in some councils. Most bridging lenders will accept search indemnity insurance instead, but only if it is raised early and the title is otherwise clean.
Title problems buried in the pack. Missing consents, restrictive covenants, unregistered land, a defective lease. Found before the bid, these get priced or avoided. Found on day fourteen, they are a crisis.
Your own structure. Buying through a company means incorporation documents, director and shareholder identification, and independent legal advice on the personal guarantee - which is a second solicitor, on a second diary, and cannot be compressed. Setting up a company after you have won is a week you do not have.
Source of funds. Where the deposit and the balance came from, evidenced. A recent gift, a director’s loan or money that arrived from overseas takes explaining, and the explaining always takes longer than the explainer thinks.
The exit is the deal
Almost every twenty-eight-day purchase completes on short-term money, because very few term lenders move that fast. That is normal and it is fine, provided you know exactly how the bridge gets repaid before you take it.
Refinance onto a term product, sale after works, or cash from somewhere specific. “We’ll sort it” is not an exit, and a bridge without a real one is how a good purchase becomes an expensive year.
Where we can, we agree the term facility in principle alongside the bridge, so the exit is on paper on day one rather than hoped for in month nine.
If you take one thing from this
The deal is won or lost in the week before the auction, not the four weeks after it.
Send us the legal pack before you bid. A day or two later you will know what a lender will do with it, at what leverage, on what timetable, and what in the pack is going to cause trouble. And if the honest answer is that it cannot be funded in twenty-eight days, that is useful news on the Tuesday before the auction. It is worth nothing at all on the Thursday after.
Frequently asked questions
What happens if I miss the 28-day completion deadline at auction?
The seller serves a notice to complete, which gives you ten more working days with interest running at a penalty rate. If you still cannot complete, the seller can rescind the contract, keep your ten per cent deposit, resell the property, and pursue you for any shortfall on the resale. The ten-day notice period is not a realistic window to arrange finance from a standing start.
Can I use a normal mortgage for an auction purchase?
Occasionally, on lots with 56-day completion and a clean title, a fast term lender can get there. Most 28-day purchases complete on bridging finance, then refinance onto a term product afterwards. That is normal and fine, provided the exit - how the bridge gets repaid - is agreed in substance before you take it.
When should I arrange finance for an auction purchase?
Before you bid. The legal pack, guide price, tenancy position and title are all published ahead of the auction, which is everything a lender needs to give you credit-backed terms and everything a solicitor needs to flag problems. It costs a solicitor’s fee on a lot you might not win, which is not a close call against a lost ten per cent deposit.
What should I check in an auction legal pack?
The special conditions first: the completion period that binds you, and any seller’s costs loaded onto the buyer. Then title, lease length, tenancies and searches. A short lease, a restrictive covenant or a defective title can make a lot unmortgageable, and every one of those is visible in the pack before the auction if someone qualified reads it.
Do I need local authority searches to complete in 28 days?
Usually not, if the rest of the file is clean. Local authority searches take weeks in some areas, and most bridging lenders will accept search indemnity insurance in their place - but it needs to be raised early in the transaction, not discovered as an option in the final week.
Accurate as at the date above. Tax rules and lending criteria change, and your position depends on your own numbers - take advice before acting on anything here.