A third of auction bidders DO NOT look at legal packs

According to analysis by Essential Information Group (EIG), almost 36% of auction bidders do not look at the legal packs prior to bidding.

By assessing the average situation set points of the auction process for more than 18,000 properties that went to auction in 2023, EIG reviewed what Material Information was available within certain time periods.

The average number of legal documents uploaded per lot last year was 13, although these became downloadable at different stages.

Just two legal documents were available 28 days prior to auction, doubling to four at 21 days before and then increasing to seven 14 days prior.

In the final seven days before the sale, there were 11 documents available to download, jumping to 12 by three days prior and then up to 13 documents just 24 hours before the event.

Due diligence delays

EIG found that on average, seven days prior to auction seems to be the optimal time that bidders start interrogating the legal packs with 86.7% of lots having documents to download.

Yet, only 67% of lots with Special Conditions had this particular document available within this timeframe. Nine in 10 lots had this available three days prior to auction, but more interesting, almost 5% of lots has Special Conditions uploaded on the day of auction.

This leaves a worryingly limited time for due diligence purposes, especially when this document is one of the must-read files that outlines aspects like completion times, additional fees and other pertinent information buyers should be aware of before making a bid.

This leaves a worryingly limited time for due diligence purposes.”

EIG’s report writes that the most important document in a legal pack is often the one that isn’t there, and that: “There are numerous reasons why the legal pack may not be complete until just before the start of the sale and it is prudent to ensure every document is thoroughly examined and any queries satisfied before placing a bid.”

National Trading Standards provides clear guidance to all property professionals as to what Material Information should be included when selling or letting a property and all prospective buyers are advised to seek legal advice prior to bidding.