Buying a Property at Auction
Posted on 11th September 2018 at 13:07
If you want to circumvent the traditional buying route for a home, flat or commercial premises, you can always try you hand at a property auction. It’s not generally for the faint hearted but has become an increasingly popular way to pick up a great deal.
While it might not be the usual fayre from your average estate agent, you could well be getting a bargain that delivers a great ROI.
Find Your Auction House
Most areas, including Northampton, have their own local auction houses. Their properties are advertised quite widely on sites such as RightMove and Zoopla as well as on individual auction sites. You can opt to get on their mailing list so that you stay informed of up and coming properties that are going to auction.
Do Your Research
The first thing you need to do is understand the market in the area that you are looking to buy. Study the housing prices and what you should reasonably expect to pay for a property. That will give you an idea of what your maximum bid is going to be when you take part in any auction.
If you overbid, pay too much and end up winning the auction, you can’t then back out. This is why understanding what your limits are is imperative. Once that hammer comes down, you are legally bound and ducking out could cost you money as well as expose you to proceedings through the courts for non-payment.
Terms and Conditions
Each auction house will have its own terms and conditions and you should read these carefully to ensure you know what the rules are. For example, you will probably be expected to pay a deposit immediately and complete the balance of your successful auction bid within about 20 days. You need to be sure that you can meet these requirements and any other conditions.
Visiting the Property
A date is usually set for the auction and it’s up to you to view the property and make up your mind whether you want to bid on it. That includes surveying the property and making sure that you know what work needs to be done and any potential problems that come with the property.
Sorting Out Finance
With the short time that is given to paying for the property once you have succeeded at auction, you need to have your finances in place beforehand. The last thing you want is to get the property you want and suddenly find that the mortgage or other finance avenue has broken down.
You are not going to know the exact price until the auction is finished, of course. The guide price shown by the auction house often reflects the minimum or reserve price that the seller is looking for (below which they are not willing to sell). If you’ve done your research, however, you will have an idea of how much the final asking price is going to be and can organise your finances accordingly.
Engage a Solicitor
Any auction property should have legal documents available for download. You need to give these to your solicitor prior to the auction and also instruct any land searches if required. These can make a big difference to how much you decide to bid and what your limits are.
Taking part in an auction can be both exciting and terrifying at the same time. It helps, therefore, to go along to one or two and see what happens. Choosing the right property will be be the biggest decision you make and you also need to be cool under pressure while staying within your budget.
Get it right and you can end up with a great property at a much lower price than you would buying through a normal estate agents.
If you are buying at an auction and need some advice, contact us today to find out how we can help.
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