13th December 2023
Auctions are, by both nature and necessity, very highly-organised events. After all, with auctioneers, sellers and buyers all relying on everything running without a hitch on the day, it’s in everyone’s best interest to ensure that all the ‘t’s are crossed and the ‘i’s are dotted well in advance. However, even with all the meticulous planning involved, unforeseen circ*mstances can occur and things can still go awry.
If you’re participating in an auction, it’s best practice to familiarise yourself with the procedures and rules in place in the event of a cancelled auction, removed listing, or bidding withdrawal. At SDL Property Auctions, we’ve seen it all, and know exactly how to proceed in such circ*mstances. Whether you’re a seller having second thoughts about your listed property or have received an offer you’d like to accept, or a seller wondering what your rights are in the event you suffer bidder’s remorse, read our full guide below to keep yourself prepared and aware.
Can a property auction be cancelled?
In short, yes an auction can be cancelled. The procedure for a cancelled or postponed auction will differ depending on the auction house that has organised the event, but here at SDL Property Auctions we always seek to give as much notice as possible to sellers and registered buyers. In our long history, cancelled auctions have been exceedingly rare, and we only do this as a last resort under unavoidable circ*mstances, such as technical difficulties before our live-streamed auctions.
If you’re concerned about an event not going ahead, be assured that, if you’re associated with the auction in any way, our teams will do their best to notify you of the postponement or cancellation by email. We also share important updates in our full auction catalogue, which you can view regardless of whether or not you’re registered with us before the event.
Can a property be withdrawn from an auction before the event?
Yes, lots can be withdrawn or postponed from the auction, or sold prior to the auction making it unavailable for bids on the day. This means that, if you’ve registered to bid in the auction on a particular property, you may find that this lot is no longer available on the day itself. While this is understandably disappointing to buyers who have their hearts set on a property, it is within the seller’s rights to change their mind or accept another offer.
In these circ*mstances, we always include an announcement in the auction addendum sheet. This can be found on the auction catalogue and auction page of our website and is updated regularly. Updates can also be published on the day of the auction itself, so be sure to check back often to ensure you’re aware of any changes as they happen. If you can’t access this for any reason, announcements of removed listings will also be made during the auction at the time when that lot would have been open to bidding.
What does it mean when a property is withdrawn from auction?
As mentioned above, there are several reasons why a property would be withdrawn from an auction event, and different terms associated with each reason. We’ve included a brief overview of these terms below so you can recognise them and their meanings should you come across them in the auction catalogue or addendum.
Withdrawn
If a property has been ‘withdrawn’, it means that the seller or auctioneer has decided to remove the listing from the Auction Event. One of the common causes of this is a change in seller circ*mstances, whether that be a change of heart, personal circ*mstances causing a clash of schedule, or financial issues. It is possible for withdrawn properties to be re-listed at a later date, but this is not guaranteed.
Postponed
In contrast to a ‘withdrawn’ lot, ‘postponed’ auction properties are expected to be re-listed at a later date. While some buyers may approach a postponed lot with some level of suspicion or concern, this needn’t be the case. Without further explanation from the seller, or the auctioneer on their behalf, it can be tempting to worry about why a lot has been pulled from the schedule, but quite often this decision has nothing to do with the state of the property itself, and is a more personal decision. The most common reason for postponement is caused by delays in creating a complete legal pack, but other issues can also arise, for example, if an inherited property has been listed for sale, and there is a delay securing probate, the lot must be postponed for legal reasons.
Sold prior
As the name suggests, ‘sold prior’ is the term used when a sale has been agreed upon before the Auction Event. Sellers can receive and accept offers ahead of the auction date if they choose to, so if you’re a buyer it may be worth keeping this in mind and approaching the presiding auctioneer to ask if a deal can be reached. There are benefits to this approach to both parties, as the seller can achieve a faster sale, and the buyer can reduce the amount of competition faced.
If you’re interested in a particular auction property and don’t want to risk seeing ‘sold prior’ in the addendum before the event, you can make an official enquiry by sending your written offer to [email protected]. Offers made proper to the auction must be more than 10% above the guide price to be considered. As long as this condition is met, your offer will then be passed onward to the seller in question, who may decide to accept, negotiate or decline.
What can I do if a property has been withdrawn, postponed or sold prior?
As a buyer, there are a few things you can do if the property you’ve had your eye on has been marked in the auction addendum sheet as ‘withdrawn’ or ‘postponed’. The number one thing is to keep an eye out for the lot being re-listed at a future Auction Event. If the property has been marked as ‘postponed’ you can expect that this will be the case, and ‘withdrawn’ properties have been known to do this in the past. In some cases, these properties may also be re-listed under a different sale method, such as in our Buy It Now or Timed Auctions, so monitoring these auction types is also worthwhile.
Unfortunately, while these options remain available to these types of removed auction lots, those which have been sold prior will already be in a legally binding contract to complete the sale. Because of this, if you’re worried about missing out on a lot, the best way to reduce the risk of seeing a ‘sold prior’ sign is to be the one who bought the property early. If you do make an offer and it’s rejected by the seller in favour of going to auction, you can then also be more confident that the lot in question will make it to the planned event.
Can a seller cancel a property auction?
While a seller has the right to withdraw, postpone or accept offers on a property before the auction itself, once a bid has been accepted the contract is legally binding, they are no longer able to cancel the sale. This is put in place to protect the buyer from being gazumped, in the same way that winning bids are binding to ensure the seller isn’t left stranded should they pull out.
Can you change your mind after bidding?
Technically, yes, as a buyer you can withdraw a bid made on a property under the specific condition that you do so before the hammer falls. Once this happens, the bid becomes binding and the sale must be completed within the pre-specified conditions of the particular lot. This legal right is specified in the Sale of Goods Act 1979, which states the following concerning auction sales:
‘A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer, or in other customary manner; and until the announcement is made any bidder may retract his bid.’
Sale of Goods Act 1979 – section 57 (2)
This means that, if you change your mind mid-auction about a property you’ve submitted a bid on, whether that be because you’ve gotten carried away in the moment and bid past your budget, have seen a different property that would be more suitable, or have simply decided it’s not the one for you, you can revoke the bid. This must be done swiftly, and before the conclusion of that specific auction lot’s bidding time, and the bidding will re-commence at the previous highest offer.
It’s worth keeping in mind that, though withdrawing a bid is allowed, it is not something we recommend risking. Please utilise the guidance of your solicitors, and our own auction team, prior to the auction to help you make your decision on whether or not to bid, and set a firm budget to ensure no issues arise during the event.
Can you back out after winning an auction?
No, buyers who have the winning bid at an auction are legally bound to complete the sale within the pre-disclosed time frame. If, for any reason, the sale falls through at this point and the buyer is at fault, they will face fines and potential legal action for breach of contract. We’ve included more about the penalties involved in this below, but first, we’ll cover the two exemptions to this rule; conditional auctions and auction misrepresentation.
Conditional auction
Conditional auctions present an unusual exception to the above rule that once a bid has been accepted, the buyer is legally bound to complete the sale. This is because, in a ‘conditional’ auction, the buyer enters into an exclusivity period (usually of 60 days with SDL Property Auctions) during which they are expected to get their finances in place and complete the sale. In this type of auction, the buyer can retract their offer while still within their reservation period without incurring any cancellation fees or legal issues, though they do need to still pay the full reservation fee, which will not be refunded if they pull out of the sale.
You can learn more about the difference between conditional and unconditional sales in our dedicated blog.
Auction misrepresentation
In cases where the purchased property has been grossly misrepresented and defects on the property haven’t been disclosed rendering it unmortgageable, buyers have a case for withdrawal of their bid. This right is detailed in the Misrepresentations Act 1967 (chapter 7, section 1), which states that:
‘Where a person has entered into a contract after a misrepresentation has been made to him, and… the contract has been performed… he would be entitled to rescind the contract without alleging fraud.’
Misrepresentations Act 1967 (chapter 7, section 1)
It’s worth noting that, if issues with the property have been disclosed in the legal pack, even if these render the property unmortgageable, the conditions for proper representation of the property have still been met prior to the sale and the buyer cannot withdraw their bid without facing legal consequences. This is just one of the reasons that we always encourage potential buyers to do their due diligence and read through the legal pack before bidding.
What happens if you pull out of an auction property?
Pulling out of an auction as a buyer once a sale has been agreed can have substantial consequences. Even in cases where you win an auction and can’t pay, or your financial arrangements fall through, you will still be required to pay the deposit on the purchase, as well as the auctioneer’s charges and legal fees. It’s also within the right of the seller to take legal action against the failed buyer.
While this can be intimidating, be assured that sales falling through by auction are exceptionally rare. There are also options in place to help give buyers the security they need to proceed with a sale safely. In particular, if you’re relying on mortgage lenders to fund the purchase, conditional sales (as mentioned above) provide a longer completion period in which to organise finances.
Prepare for an upcoming auction with SDL Property Auctions
Whether you’ve got your eye on a property in one of our upcoming auctions and are familiarising yourself with the processes before bidding, or are a seller considering putting an auction lot up for sale and want to know your rights to withdrawal, our knowledgeable auctioneers are on hand to help. Simply get in touch with our team and direct any questions you have about selling and buying our way. We’ve also got a wide range of further information available in our full Advice Hub.
