Thinking of buying a property at an auction? You’re not alone. Auction sales have become a popular way for investors and homebuyers to get great deals. But here’s the thing—while it may seem like a fast track to owning property, it’s not as simple as raising your paddle and walking away with a house.

Let’s break down what you really need to know before bidding on a property at auction.

First Things First: Understand What You’re Getting Into

When you buy property through an auction, you’re expected to make decisions quickly—and sometimes, without full access to all the facts. It’s almost impossible to know every single detail about the property beforehand. But don’t worry, what matters most is understanding the key legal and practical factors that affect the validity of the sale.

In fact, if a sale turns out to be irregular or improperly handled—and you were aware of it—you could lose legal protection. That’s why doing your homework, also known as due diligence, is a must before attending any auction.

What Is Due Diligence in an Auction Sale?

Due diligence means taking time to gather all the important information about the property you’re interested in. From understanding the type of auction to knowing who the auctioneer is, your goal is to be as informed as possible before you place a bid.

Let’s go through some of the most critical questions you should ask yourself.

Is the Auctioneer Licensed?

This is step one. You should always check whether the auctioneer is a licensed professional. In Kenya, a valid auctioneer’s license is issued by the Auctioneers Licensing Board under the Auctioneers Act No. 5 of 1996.

Pro tip: The license is granted to an individual—not a company—and it cannot be transferred. If the auctioneer can’t prove they’re licensed, that’s a red flag.

Is the Auctioneer Authorized to Sell the Property?

There are two common types of auction sales:

  1. Statutory Auction Sales – Usually conducted by banks or lenders after a borrower defaults on a loan.

  2. Owner-Initiated Auction Sales – Where the property owner hires an auctioneer to sell the asset.

In either case, make sure there’s proper documentation (like a court order, warrant, or a letter of instruction) that authorizes the auctioneer to conduct the sale.

What About Statutory Sales by Lenders?

Here’s where it gets a bit legal, but it’s important.

If the property was used as collateral (i.e., charged to a bank), the lender must follow strict steps before selling. According to Section 96 of the Land Act, 2012, the borrower must be given:

  • 3 months’ notice to rectify the default

  • An additional 40 days’ notice to sell after the initial period

And that’s not all.

The Auctioneers Rules, 1997 (Rule 15(d)) also requires that the auctioneer give a mandatory 45-day notice before the sale. Skipping these steps can invalidate the auction. So be sure to check that all these notices were served.

Do this by doing an official land search to confirm ownership and if the property is under charge.

Buying from a Private Owner?

If it’s not a bank sale and being conducted by a private seller, things are a bit simpler. Still ask to see the written authority from the owner allowing the auctioneer to sell the property.

You’ll find more property info in these sales—so do your homework.

What’s in the Auction Ad?

According to Rule 16 of the Auctioneers Rules, 1997, every auction ad should have:

  • Date, time and venue of the sale

  • Terms and conditions

  • Viewing schedule for the property

  • Accurate description of the property

  • Details if there’s a reserve price

  • Court order or letter of instruction supporting the sale

If any of these are missing—especially the terms of sale—be careful.

What’s a Reserve Price and Why Does It Matter?

A reserve price is the minimum price the seller will sell for. In some auctions the auctioneer may also reserve the right to bid on behalf of the seller.

As a buyer you need to know:

  • If the property has a reserve price

  • If the seller has reserved the right to bid

Knowing this will prevent you from overbidding on a property that may not even sell unless that reserve is met.

What NOT to Do at an Auction Sale

Here are a few things to avoid like the plague:

  1. Don’t rely on the auctioneer’s information. They may not tell you everything.

  2. Don’t read the auction terms and conditions. They’re usually in the ad or available before the sale.

  3. Don’t assume it’s a good deal just because it’s an auction. Do your own research.

  4. Don’t ignore legal red flags—like missing documents or unlicensed auctioneers.

Remember: If it sounds too good to be true, it probably is.

Final Thoughts: Think Before You Bid

Auction sales can be a great way to buy property at a lower price—but only if you take the time to understand how the sale is being conducted, who’s conducting it and if all legal procedures have been followed. Do:

  • Is it statutory or owner?

  • Has it been done right?

  • Have I got everything?