Buying a property at auction can be a fantastic way to score a bargain. One of the other main advantages is that it avoids the time-consuming buying processes; once you have won the bid, the property is yours! However, when purchasing a property at an auction there are many things that you will need to consider. In order to make the most of an auction, it is essential that you do your research in advance of the event. Here is a guide to get you started.
We've helped you out here by listing a whole range of areas where there are properties for auction. Additionally, you can search property magazines and newspapers and also ask your local estate agents.
If you've decided on an auction to attend, request a copy of the catalogue with the bidding listings and begin your research on the property (including arranging viewings) that has piqued your interest. Unless you have the financial flexibility, it’s advisable to avoid purchasing purely based on the details in the catalogue.
One thing you’ll need to do is compare the price and condition of the property you're keen on to similar ones for sale with estate agents. The starting guide price will be low but this is only to encourage people to start bidding so that it can rise rapidly. Always be aware of the market price so you can determine how much you’re willing to go up to.
Once you've decided on which properties you're interested in, contact the auctioneers and arrange viewings. It's usually the case that auction properties can be run down and in need of work so it's wise to take a builder, architect or at least someone who is experienced in renovating homes with you. They can give you feedback on what work will need to be done and how much it will cost. Next, weigh up the cost and benefits and decide upon the maximum price you will be willing to bid to (should you still wish to go ahead based on the viewings).
The nature of auctions is always time sensitive and there are usually only four weeks between the publication of the auction catalogue and the auction itself. With this in mind, doing your research, arranging viewings and then completing any follow up research will need to be executed quickly.
You should be issued with a legal pack when you express interest in a property to be auctioned. Make sure you read this thoroughly and if you can, obtain a professional opinion as it could contain covenants or certain legal implications which may impact the value of the property.
If you know someone who has experience with auctions take them with you, because to bid for something as substantial as a property as a novice can be a scary process! Be aware that it could be incredibly busy, tense and fast paced. Be committed to your maximum bid and stick to it. This is also why it helps to take someone you trust to keep an eye on this as It can be easy to get carried away and make poor decisions on the spur of the moment.
Also, be aware that if you’re bidding on a property and it doesn't meet its reserve price, this doesn't mean that you've lost out. The auctioneers can still act as agents and set up a deal between you and the vendors if a price can be agreed at the end of the lot. In fact, this can be a great way of scoring a bargain.