Ignore this if you want to lose at auctions
The Special Conditions of sale is the most important document when buying at auction and I'm confident most people have never heard of it before. It can be 1 line or it can be 10 pages long. These are the special rules or conditions that make up the property/land or purchase you are making.
One common mistake people buying at auctions make is overlooking the Special Conditions of Sale. These are additional terms that may not be in the standard auction contract. For example, they may include:
- Extra Costs: Such as the seller's legal fees, or just additional fees which you must pay. These extra cost are sometimes (most times) slyly inserted into the SCOS and the inexperienced investor will never notice until they are hit with an invoice for an £10,000 that they didn't factor into your deal.
- Completion Deadlines: Tight timelines for payment and transfer of ownership.
Missing these details will lead to unexpected costs and, in some cases, losing your deposit if you can't meet the conditions.
As exciting as property auctions can be, they're not without risks. The best way to mitigate these risks is to read the legal pack thoroughly, and make sure you hand it over to your solicitor. Buy trying to save a couple of hundreds of pounds by not paying a solicitor can end up costing you thousands of pounds instead.
Ps: Tomorrow I will be releasing a 30 minute video in the paid community breaking down a live example of a SCOS on an auction purchase I am trying to buy. Upon reading the SCOS I have discovered an additional £9000 the auctioneers and the sellers have slyly inserted into the SCOS.
This video is a must watch for anyone that wants to buy auction properties one day.