Advice From: Ian Tudor, BSc(Hons) MRICS,

 Commercial Auction Director

Expert planning advice. Selling or leasing the property post-purchase.

Know your market.

What demand will there be? How long will it take to secure the purchaser or tenant?

Knowing the ins and outs of your market gives you the edge, helping you navigate the process smoothly.

Costs to market your property

Remember to factor in your property marketing costs, professional fees, and holding costs, such as business rates, insurance, and security.

Don’t let hidden costs catch you off guard – plan and maximise your property’s market potential!

Insurance and Protection: Learn about the types of insurance needed for commercial properties bought at auction.

A purchaser is liable for building insurance and contents insurance, if applicable, immediately upon the exchange of contracts. I suggest getting this in place as soon as possible.

Seeking Professional Advice: When and how to seek advice from property professionals, including solicitors, surveyors, and financial advisors.

It’s critical that specialist advice is sought prior to bidding.

Financial Advisors:

• Timing: Seek financial advice as early as possible in your property search process. Having a clear understanding of your financial situation and borrowing capacity will help you set realistic expectations.
• How: Consult with a financial advisor or mortgage broker specialising in property finance. Provide them with your financial details and discuss your borrowing options.
• What they advise on: Financial advisors assess your financial situation, including your income, savings, credit history, and borrowing capacity. They advise on mortgage options, loan terms, interest rates, and associated costs such as stamp duty and legal fees.

Solicitors:

• Timing: Solicitors should be consulted as soon as you’re serious about a property. It’s best to seek legal advice before making any significant commitments.
• How: Provide the solicitor with the necessary details of the property and any available documentation. They will review the legal aspects, including contracts, title deeds, and any restrictions or legal issues affecting the property.
• What they advise on: Legal issues, potential risks, and obligations associated with the property. They can also guide you through the conveyancing process and help you understand the legal implications of your purchase.

Surveyors

• Timing: Surveyors should be engaged after you’ve found a property you’re interested in and before making an offer or bidding.
• How: Contact a reputable surveyor and arrange for a survey to be conducted on the property. You can choose from various types of surveys depending on the property’s condition and your requirements.
• What they advise on: Surveyors assess the physical condition of the property, identifying any structural issues, defects, or potential problems. They provide estimates for repair costs and may advise on the property’s market value.

Specialist advice must be sought prior to bidding. If you are not sure after receiving this or have doubts, don’t bid!!

Post-Auction Process: What happens after you win a bid, including deposit payment, paperwork, and completion timelines?

After winning a bid, a 10% non-refundable deposit is paid immediately, and contracts are exchanged. The sale at the “hammer price” is legally binding and cannot be renegotiated. Solicitors will then work towards competition when final monies are paid and the property is handed over, which is typically 28 days following Auction Day. The contract will specify this, occasionally shorter, sometimes longer.

Future Outlook: Predictions for the future of commercial property auctions and investment strategies in the changing landscape of 2024

Commercial property is traditionally a sound investment for the medium to longer term. When commercial properties are let, typically, the repairing obligations fall on the tenant, unlike residential lettings.Having a mix of commercial properties in an investment portfolio is sensible, as it spreads the risks in uncertain times. The market for commercial property remains bright as we head into Spring 2024. There have been some price adjustments over the last 12-18 months with the cost of living crisis, increased cost of borrowing, instability in Ukraine and the Middle East, impending change of UK government, etc, but it is generally a robust sector, and historically there is always a point where commercial property prices are recalibrated.