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If you're new to the auction rooms it's essential to understand what the most frequently used terms mean. Here's what you need to know...
Addendum - an amendment or addition to the conditions where contained in a supplement to the catalogue. This may be a written notice in the catalogue or announced at the auction.
Bankers Draft - a cheque drawn by a bank usually on its own Head Office. It is generally accepted as the equivalent as cash although it needs to be paid into the bank's clearing system in the same way as any other cheque.
Bid - this is the offer to buy property at a specific price.
Buyer's Administration Fee - a payment made by the Purchaser to the Auctioneer at the point of exchange to cover the added cost of insurance and staffing relating to the conduct of the sale and Money Laundering Regulations.
Catalogue - the catalogue gives a description of the property details and how to view each property and the general Conditions of Sale. The catalogue description forms part of the Contract.
CHAPS - Clearing House Automated Payment System - the system allows for the payment of any amount to be transmitted electronically by one bank or branch to another on the same day. This is the most common method of transferring funds between lawyers on completion of a property purchase.
Completion - the date by which the sale must be finalised. Penalties will be applied if the sale is completed late which can include losing your deposit.
Contract - a signed agreement in writing for the sale of the land agreed between the Buyer and Seller containing all the terms agreed between them.
Covenant - an agreement which is contained in the Deeds where a person agrees either to do or not to do something.
Deposit - the sum paid on exchange of contracts to secure the purchase, normally 10% of the purchase price but sometimes subject to a minimum figure. The deposit is a part payment on a guarantee that the Buyer will complete the purchase. If the Buyer unjustifiably refuses to complete, the deposit is forfeited and kept by the Seller less Agents and Solicitors fees.
Epitome of Title - a chronological index of documents which prove title to the land to be mortgaged or sold. It is accompanied by photocopies of the relevant documents.
Exchange of Contracts - if you are the successful bidder at the auction sale, the sale is binding on the fall of the hammer and you will be asked to sign and exchange contracts in the auction room. The Auctioneer has the authority to sign the contract on behalf of both Buyer and Seller.
Ground Rent - the annual rent payable in return for a lease of land.
Legal Pack - the Vendor's Solicitor prepares a Legal Pack containing copies of all the legal papers. This should include (where applicable) copies of the Special Conditions of Sale, Title Deeds, Leases, Office Copy Entries, Searches and Replies to Pre-contract Enquiries.
Lot - each separate property being sold.