Property Advice: What should I do before buying a house in an online auction?

I have a few questions: Why might a property be sold via online auction? Does this suggest there could be an issue with it? What are the key things I should check before the auction?

Jack 

Thanks Jack, for your question. 

The two most common methods properties are sold in Ireland are by private treaty and auction.

Selling by the former is the most widely used. This is where a property is listed at a guide price and buyers make offers through an estate agent. Negotiations take place, and once an offer is accepted, contracts are signed, and the sale progresses. This process can take weeks but usually takes three to four months to complete.

In an auction sale a property is marketed with a set time and date, and buyers compete by placing bids. The highest bid wins, and once the auction ends, the sale is legally binding. Completion typically happens within a fixed timeframe, often 28 days.

In the past decade, online auctions have become an increasingly popular way to sell, especially for those seeking a fast, transparent, and efficient transaction. Advances in technology have made online auctions easy to use, giving buyers the ability to bid from anywhere in real time.

Since the majority of property sales in Ireland are still done via private treaty, I understand why you’re questioning why this particular bungalow is for sale by online auction.

Why might a property be sold by online auction?

There are several reasons why a seller might choose an online auction rather than a private treaty sale:

1. Speed – Online auctions provide a fast and certain sale, often completing within 28 days, making them ideal for sellers who need a quick transaction.

2. Certainty – Once the virtual hammer falls, the sale is legally binding, meaning there’s no risk of the buyer pulling out or renegotiating the price.

3. Transparency – Buyers can see competing bids, making the process open and fair.

4. Investor Sales – Some sellers, particularly landlords or developers, prefer auctions because they are a straightforward way to sell investment properties.

5. Repossessions or Probate Sales – Banks, financial institutions, or executors of estates often sell via auction to achieve a market-driven price without long negotiations.

6. Unique or Hard-to-Value Properties – If a property is unusual or difficult to price, an auction allows the market to determine its value.

7. Problem properties - Some houses are unsaleable because the title showing ownership to the property is badly flawed or there are big planning problems. However, almost any property can be sold by auction. The special conditions contained in the contract for the sale can be carefully drafted to exclude the defects and liability of the seller for same. It is up to potential purchasers to review the title, read the contract and the special conditions and form their own opinion. This is a classic case of “caveat emptor” (buyer beware) So, just because the property is being sold via online auction doesn’t necessarily mean there’s a problem with it. However, it’s really essential that you carry out due diligence before bidding.

Checks to carry out before the auction 

Since you haven’t viewed the property inside yet, you should do as much research as possible to ensure you’re making an informed decision. While photos can be helpful, they don’t always tell the full story. 

Try to visit the property in person to check for any visible signs of issues such as:

• Damp patches or mould 
• Cracks in walls or ceilings 
• Signs of subsidence 
• Roof condition 
• General wear and tear 

If you can’t view it yourself, consider sending a chartered surveyor or a trusted friend to inspect it on your behalf.

Unlike private treaty sales, auction properties are sold as seen, meaning you won’t have an opportunity to renegotiate after the auction. That’s why getting a survey done is so important. 

A chartered building surveyor can provide you with a structural survey to identify any potential problems, giving you peace of mind before you bid.

Any property going for sale will have a legal pack containing critical documents. These include: 

• Title deeds 
• Special conditions of sale 
• Property searches 
• Leasehold details (if applicable) 

Have a solicitor review these documents to check for issues such as legal disputes, planning restrictions, or outstanding charges on the property.

Every auction house operates slightly differently, so it’s important to check the requirements. Typically, you’ll need to pay a 10% deposit immediately if you’re successful, so you need to have those funds to hand. Many auctions require completion within 28 days or less so that’s why proper preparation is key. 

Also be aware of the possibility of additional fees. For example, some auctions charge a buyer’s premium, which is an extra cost on top of the winning bid.

If you’re not a cash buyer, check that your mortgage lender is willing to finance an auction purchase. Some lenders require additional checks, and not all properties qualify for traditional mortgages. If necessary, look into bridging finance as a short-term solution.

How to bid on the day of the auction 

If you decide to proceed, you’ll need to register to bid. Most online auctions require pre-registration, including submitting ID and proof of funds.

Online auctions can be fast-moving, so familiarise yourself with the system beforehand to ensure you’re comfortable with how it works.

I would strongly advise you to set a maximum budget in advance. It’s easy to get caught up in bidding, so decide your upper limit before the auction starts and stick to it.

Auctions start at a set time, and bidding takes place in real time, each bid increasing the price until no further bids are placed. Some online auctions have an extended bidding window if a bid is placed in the final few seconds.

However, once the virtual hammer falls, the highest bidder wins, and the sale is legally binding.

Success 

If you’re successful you must immediately pay the deposit – typically 10% of the purchase price. Contracts are exchanged and you are now legally committed to buying the property.

You must complete within the agreed timeframe – usually 28 days but sometimes sooner. If using a mortgage, ensure funds are ready. Your lender must release the funds before the deadline, or you risk losing your deposit.

People sometimes ask me what happens if you change your mind. Unlike private treaty sales, you cannot pull out after winning an auction without serious financial consequences. 

If you fail to complete, you will lose your deposit and may also be liable for additional penalties. That’s why it’s so important to be sure that you want a property and that you have the funds to hand to buy it.

Buying a home through an online auction can feel daunting at first, but with the right preparation, it can also be an exciting and rewarding experience. The key is to do your homework, understand the process, and go in with a clear plan.

• Majella Galvin is Chair of the Membership and Public Affairs Committee of the Society of Chartered Surveyors Ireland. A chartered surveyor, estate agent and registered valuer at DNG Galvin Auctioneers Bandon, she has been working in the property sector for over a decade - www.dnggalvin.ie 
• If you have a property-related query or issue you would like to raise with Majella, please email irishexaminerpropertyqueries@scsi.ie