If you are looking to sell your tenanted property at auction, here are a few tips to give you the best chance of successfully selling to another property investor.
The following scenario is pretty brutal, but it happens very often!
Picture the scenario: you are a busy conveyancer, with your mind on getting your exchanges and completions set up for the coming Friday. You receive a call from a client you have worked for in the past. He asks you to look through an auction pack for an auction that is due in the next few days. You groan because it means effectively that you have to go through a whole legal title without the opportunity to ask the seller’s lawyer questions about the contents of the pack. The reality is that most clients will not want to pay more than £150 for the advice. So, you, as a lawyer, are potentially taking full liability for telling a client to go ahead and purchase the property without having had time to properly investigate the title. Most conveyancing lawyers don’t have an in-depth knowledge of the new regulations contained in the Renting Homes (Wales) Act. Lawyers are naturally defensive, so the easy option that most would take is to look for the gaps in the title and warn the potential purchaser not to go ahead because of the “unknowns”. The result for the lawyer is a £150 fee and NO liability because the property isn’t purchased.
This is the reality of what actually happens in lawyers’ offices. I know this first-hand as I am a property lawyer.
Obviously, some potential buyers don’t go to property lawyers to get the pack checked out.
BUT, the most important point to note to avoid losing potential buyers is that the better the quality of information in the sales pack, the more chance there is of the lawyers advising their clients to bid on the auction property.
It’s all about taking away the potential buyer’s lawyer’s reasons to say no and therefore it is essential that you:
1. Get a specialist auction property lawyer to prepare the Legal Pack – your auctioneer can recommend one.
2. Get the documents to your lawyer as soon as possible.
3. Make sure that you have ALL of the documents that you served on your Contract Holder (Tenant) including the Occupation Contract, Rent Increase documents, and any Notices Served. If you have a letting agent, make sure that they get you ALL of the documents given to the contract holder.
The more complete the picture looks, the happier the buyer’s lawyer will be and the more potential buyers you will have.
IT IS ESSENTIAL TO GET THIS INFORMATION TO YOUR LAWYER AS SOON AS POSSIBLE; THE EARLIER AN AUCTION LEGAL PACK IS PRODUCED, THE MORE CHANCE YOU HAVE OF ATTRACTING POTENTIAL BIDDERS.
Julian Ings
Consultant Property Lawyer
Ringley Law LLP
122 West Bute Street, Cardiff Bay CF10 5LJ
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