Buying a property at auction
You can often get real bargains when buying a property at auction, but it takes preparation, control and cash to succeed.
Preparation for buying a property at auction
If you are new to property auctions we recommend you either arrive early and sit in on the proceeding to get a flavour for the event, or better still go to an auction beforehand. Observing the flow of events and how people bid will allow you to keep focused when it comes to your turn. You could even try your hand at bidding at antique auctions for practise.
However, first of all you must find a property you like. Contact property auction houses and request their catalogue. Most will have this available a few weeks in advance.
After finding a property that interests you, arrange a viewing using the information detailed in the catalogue.
After the viewing, it is a good idea to ask neighbours or even local estate agents for further information about the property before you make the next step and part with cash.
Instruct your solictor to arrange property searches and also arrange surveys so that you get the results well before the auction day.
It is common to pay a 10% deposit when the contracts are signed so ensure you have ample and available funds in place before the auction day. The remainder would be paid within 20 working days typically.
If you are not a cash buyer, you should arrange a Mortgage in Principal with a mortgage lender so that you can pay the remaining balance within the given timeframe. Failure to do this could mean losing your deposit AND the property.
Bidding at auction
Before arriving for auction calculate your maximum price you would be willing to pay for the property and stick to it!
When bidding for your property, it is wise not to rush in first and drive the price up. Gauge the mood of the other bidders - are they property developers after a very cheap bargain or do they look like first time buyers bidding for their dream home?
However tempting, do not bid over your limit. Buying at auction is as legally binding as a signed contract.
Drawbacks to buying property at auction
A drawback to buying property at auction is that you must arrange and pay for all the relevant property searches and surveys in time to get the results before the auction day, so you could end up paying for these even if you are unsuccessful in buying the property.
Benefits of buying property at auction
The main advantage of buying property at auction is that you should be able to purchase property for well below normal asking prices. Properties available at auctions are often listed by banks, building societies or orgainisations who are keen to recoup money quickly, regardless of whether it is at the market rate or not.
Another advantage of buying property at auction is that you avoid the usual and lenthy process of house buying. Once the hammer falls, you own the property.
It's one hell of a buzz!