Buying property at auction is a transparent, proactive, timely and often lucrative means to securing your ideal investment within budget. Long gone are the drawn out processes and risk of everything falling through last-minute, often experienced through private treaty sales.
Auction is a great way to create competitive bidding to maximise the value of a property and the best way of bringing motivated
buyers and sellers together. When the hammer falls, contracts are exchanged, which is legally binding – the property
is sold unconditionally. However, buying through auction must not be underestimated and as such, research is key.
Here are ten tips, which may help your decision-making:
Finding auction properties is easy via The Essential Information Group eigroup.co.uk – “the one stop shop for all property
auctions and auction related material around the UK”.
Devote time to studying the auction catalogue…
Catalogues are usually available online and free of charge. It’s no good just turning up on Auction Day and randomly
bidding on properties – this is a risky strategy to follow. It may get the adrenaline pumping relying on that ‘gut
feeling’, but being prepared is the way to go.
Go and physically visit the property…
Don’t make the mistake of buying a property “blind”. Ad hoc viewing appointments are rare, so published open viewings
are held in line with a viewing schedule. Always attend your chosen property in person at least once – having a
builder/architect tag along can be useful.
Conduct thorough research…
It goes without saying that detailed research is a pre-requisite to buying at auction. Find other similar properties
or examples that might be on the market with local Estate Agents and complete an exercise to compare price and condition.
Remember, prices set at auction are only a guide, so work out what the true market value really is and bid realistically.
Read the Legal Pack…
You can register interest in a property with the Auctioneer by requesting a Legal Pack. This information can be requested
online via eigroup.co.uk and may contain copies of the Title Deeds, Special Conditions of Sale, Land Registry Search,
Leases (if applicable) and other relevant documents. You must inspect these, or even better employ the wisdom of
Ensure finances are in place…
On Auction Day, you will pay a 10% deposit of the hammer price and the remaining balance must be settled within 28 days.
For those requiring a mortgage, a formal mortgage offer must be in place rather than a mortgage offer in principle.
Contact your lender and talk things through – it’s best practice to confirm the financial implications associated
with a purchase.
For novices, buying at auction can be overwhelming. There’s really nothing to be worried about, as the process is uncomplicated.
The best plan of action is before going to bid for real, do a trial run as an observer just to familiarise yourself
with the process and set expectations.
Proof of ID and other info…
Part of the buying procedure involves providing identification to satisfy legislative requirements: proof of identification,
i.e. photo ID, e.g. Driving Licence/Passport and proof of UK residency e.g. utility bill/Council Tax bill/mortgage statement.
Also ensure that you have your Solicitor details at hand and funds to cover the 10% deposit, payment via cheque/card.
When bidding time comes…
It is important that your bids are acknowledged, so do make sure that the Auctioneer can see you and is aware when you bid.
Raise your hand or catalogue to maintain attention.
Stick to your budget…
With the intense competition and bidding activity experienced at auctions, it is often easy to get carried away as the bidding
increases – don’t let your heart rule your head when securing that perfect property! Setting a budget beforehand
and sticking to it is a winning formula.
You didn’t get it?…
If the property you were bidding on failed to meet its reserve price during the sale, don’t worry, it’s not all over just
yet. The Auctioneer can work with you and the Vendor as an agent in order to finalise a deal post auction. Bargains
can often be had if handled correctly.
There are no substitutes for property auctions – if you want certainty of sale, you’re in the right place. If the process
is followed in the right way, the risk is low and worry-free and the experience is thrilling and totally satisfying when
a bid is accepted. At the end of the day you may get the steal of the century at the same time…what’s the worst
that could happen…?