So you’re looking at buying a property at auction but you’ve never been before. For first-timers who are new to buying at UK property auctions, it can be a daunting experience. Auction Houses are often crowded and auctions themselves can be fast-paced. It’s not unusual to get caught up in the moment and more often than not find you’ve paid more than you wanted to for a property that’s less than desirable for what you’re looking for.
So how should you buy a property at auction?
- Research before the property auction
Find the right Auction House for the area you are interested in and study the properties within the Auctioneer’s catalogue. Once you’ve decided on the properties you are interested in, be sure to arrange a viewing with the auctioneer prior to the auction date. You usually have around 4 weeks from when the property is published in the catalogue to the auction date. When viewing, remember to keep an open mind, in the majority of cases properties for sale at auction are not always in a great state. If you can, take a builder with you to the viewing as they should be able to give you a good indication of costs for work that needs to be done which you’ll need to factor into your overall budget.
- Consider a home survey
Home surveys will cost you, but if you are serious about bidding at a property auction, consider having a home survey conducted on the property first. There would be nothing worse than winning a house at auction to then discover it’s condemned.
- Read the property legal pack
More often than not, auctioneers will provide legal packs on properties in auctions in the UK. This will include everything from the title deeds to the seller’s information forms and fixtures and fittings details. Again, if you’re able to seek legal advice through a solicitor prior to auction it would be advisable, to secure you against any hidden loopholes.
- Make sure your finances are in order
A ‘mortgage in principle’ will need to be secured prior to attending the auction if you need a mortgage to purchase the property. As soon as the hammer falls you’ll have to pay 10% on the day and then usually the remaining amount within 28 days. Make sure you know what you can afford and avoid getting caught up “at the moment”. If you’re not able to provide the funds there is a risk that you will have to cover the costs of re-auctioning the property along with any shortfall if the property is sold for less than what you won the property at originally.
- Keep calm and arrive early
It’s worth attending a few auctions prior to attending as a buyer, to help you get a feel for how the auction process works and the atmosphere. It can be quite intimidating if it’s your first time at a property auction. Make sure you arrive early to get a seat. Remember, though, you can also bid at property auctions via the telephone.
- Remember to take proof of identity with you
If you secure a property at auction you will need to pay a deposit on the day. You will also need to have two forms of identification with you such as a passport, drivers licence and/or utility bill.
- Stick around at the end of the property auction
Sometimes, and only sometimes, if a property does not reach its reserve price at auction it’s not the end of the game. A seller may be open to offering the property to the highest bid after the auction has closed. So if you’re really keen on a property but lost out, approach the auctioneer or seller after the auction to see if some negotiating can be done.