Property guides

Different ways to buy property

There are a number of different ways in which you can purchase a property.

Private Treaty

The most common way to buy a property in the UK is by private treaty on the open market. The property will be advertised with an asking price and the seller may consider offers.

In England and Wales, once an offer has been accepted and an agreement is reached, a contract of sale will be issued and those contracts signed and exchanged. The exchange of contracts will only happen once all searches have been completed and all funds have been arranged for the purchase. Because neither party is legally required to continue with the transaction until contracts have been exchanged, this part of the process is always considered to the main hurdle.

There are times where there may be multiple offers from multiple buyers and it can be time-consuming to keep going backwards and forwards. In this scenario, a ‘sealed bids’ situation may be proposed. Under this arrangement, a date and time will be set and each prospective purchaser has to submit their best and final offer. Once the deadline has been reached, the agent and vendor will review the best and final offers and then decide how to proceed. They are likely to take the offer they perceive to be the best but are not under any obligation to do so.


Buying property at auction can seem like a quick way to get a bargain but it takes a good amount of preparation to ensure that you don’t make a costly mistake.

During a traditional auction (also called a non-conditional auction), when the hammer falls the buyer with the highest bid is committed to the purchase. The contract is ‘exchanged’ on the fall of the hammer and from this point you cannot pull out or change your mind. The deposit, normally 10%, is payable at the same time so check in advance what methods of payment are acceptable to the auctioneer. As the buyer, you’ll also have to pay an auction premium or fee which is normally a fixed amount which is stated in advance.

After the auction, you will have 28 days to pay the 90% balance and ‘complete’ the transaction. If for any reason you are unable to complete the transaction, you will lose the deposit monies paid.

Auction properties are normally listed no more than four weeks in advance of the auction and so you’ll need to move quickly to get everything organised. The properties are often in poor condition and the opportunity to view them may be limited. Most auctioneers run group viewings at set times, once or twice a week before the auction.

Auctioneers will publish a guide price to give an indication of the minimum amount they would expect the property to achieve. This is different to the reserve price, which is the minimum the vendor would be willing to accept. Guide prices will be published in the auction catalogues but the reserve price remains confidential between the vendor and the auctioneer.

It’s important that you undertake your own research to understand how much the property could be worth in its current condition and crucially how much it is worth to you. Remember that guide prices are set to create interest and so should not be taken as a confirmation of the property’s real value. It’s worthwhile familiarising yourself with sold price information for area and property, if available. The eventual price paid however, will also depend as to who else is in the auction room and how much they bid.

The auctioneer will normally supply a legal pack, prior to the auction, containing all of the relevant documents about each property. It’s crucial that you fully understand what’s in each document and have your solicitor check the information to ensure there’s nothing that will cause problems later down the line. Because the auction process is quick and the buyer is committed on the fall of the hammer, it can be a good way to dispose of properties that may have problems and are therefore harder to sell through traditional methods.

If you need to raise finance to fund your purchase, you should put this in place in advance of the auction. As the rules and regulations around lending get more complex, you cannot guarantee you will be able to raise the money after you have bid. Having the funding agreed in advance will also help set the maximum price that you are prepared to pay.

On the day of the auction you will need to register to be able to bid, and you will need to supply identification. Bidding can be a daunting process and it’s easy to get carried away as the adrenaline of the auction kicks in. If you prefer, you can bid over the telephone at most auctions, or instruct someone to bid on your behalf, but you will need to pre-register with the auction house to do so. Auctions are normally very busy places and the atmosphere fuels the excitement. Always have a maximum amount that you are prepared to pay for the property and stick to it as the bidding continues. It is likely that you will have put a lot of preparation in advance but so don’t let this cloud your judgement as to when to stop.

Auctions can be a great way to purchase a property because the process is quick to conclude and the seller is committed on the fall of the hammer, so no chance of them puling out at the last minute. There is also the potential to get a bargain as well, but it helps to be prepared to make the most of it.

Modern Method of Auction

This is also known as a conditional auction and offers a little more flexibility than the traditional auction process.

At the end of the auction, once an offer has been accepted, the buyer will need to pay a non-refundable reservation fee. This reservation deposit will vary but is normally calculated as a percentage of the final selling price.

The buyer will then have an exclusive 28-day window to exchange contracts and then a further 28 days after that to complete the transaction.

The reservation fee won’t normally form part-payment of the final selling price and so is an additional cost that you will need to cover.

Off-Plan purchases

If you want to buy a brand-new property, a lot of homes can now be purchased off-plan which means you are committing to buying a new home before it has been built. Whilst you won’t be able to view the actual property, the developer will supply plans, CGI’s and brochures to show you what the finished product will look like or have a show-home constructed in advance.

Once you have chosen your property, you will have to pay a reservation fee, normally £500 – £1000 to show your commitment, and then have a further 28 days to exchange contracts and pay the deposit. You should always double check where that money is held before the property is ready and what will happen to it should the developer go bust.

Once the property is complete, the developer will give you notice to complete the purchase and pay the balance of the money due. Before the property is handed over it should be ‘snagged’ for any faults or damage, which the developer can then remedy before you take ownership.

New build properties are appealing to investors as they are neutral, under warrantee and often in regeneration areas. Also, investors can potentially negotiate discounts for multiple unit purchases.

  • Advantages to buying off-plan

    • You will often get the opportunity to customise your property as some developers allow you to choose or upgrade the fixtures and fittings.
    • Buying early means you will get a better choice of the properties available and possibly a discount on the purchase price.
    • There are often incentives to buy such as the developer paying the stamp duty on the purchase.
    • If property prices are rising, you get the advantage of the value of the property rising during the construction process.
    • New homes normally come with a guarantee (usually around 10 years) against faults and have an aftercare service.
    • New homes are part of the regeneration process and you may be part of and enjoy the benefits of an area improving.
    • You’ll be the first person to own and live it in.
  • Disadvantages of buying off-plan

    • You don’t have the opportunity to view the actual property before it is built and so it can be difficult to visualise what it will be like.
    • If property prices are falling then when the property is built it may not be worth as much as you have paid for it, especially if there is a long time between reserving and completing.
    • You’re relying on the developer to deliver the property on time and therefore it can be harder to plan your move as construction delays often occur. When the property is ready, a lot of developers will give you 10 days notice to complete.
    • You don’t have the option to pull out of the purchase if you don’t like it once it is built.
    • If you need a mortgage to purchase the property, your mortgage offer is only likely to last six months and so will need to be extended it depending on when the property will be ready. If you cannot extend you will need to reapply for your mortgage before completion. If your circumstances have changed, the property price has fallen or the mortgage lending rules have changed then you may not be able to secure the same amount of money as you did before.
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