One of the main attractions of buying at auction is that you avoid the usual drawn out process of house buying. Buying at a property auction is a much more transparent way to buy a home. You’ll see other bids as they’re made and when the hammer falls, you own the property. Here are our 10 top tips for buying property at auctions.

1. Locate your auctions

Contact all the relevant auction houses and request their catalogues. Most auction houses hold regular auction sales with a catalogue printed some weeks in advance. You can also subscribe to catalogue mailing lists.

 

Go through the catalogue carefully, read the details carefully and identify any properties you are interested in.

2. Research

Make sure that you do your research thoroughly and compare the price and condition of the property to others in the area, ask local estate agents and neighbours for their opinions.

 

The guide price of auction properties are normally set relatively low in order to entice bidders, so bear in mind what you think the true market value of the property is, then bid accordingly.

3. View the property 

View the home in the normal way, preferably more than once, and be sure it is what you want. Very often, auction properties are in a poor state of repair, so it is advisable to take a builder or an architect with you to find out what can be done to the property and how much it will cost.

 

Remember time really is of the essence. There is usually four weeks between the publication of the auction catalogue and the auction, so you have to act fast.

4. Make legal checks

When you express an interest in a property to the auctioneers, there is usually a legal pack available for you to read. You will need to digest this thoroughly, if you’re not sure about anything, have your solicitor check it out. It could contain covenants or certain legalities which could effect the value of the property.

 

You will need to carry out all the usual searches, enquiries and title checks, but sometimes the seller’s solicitor will carry out the searches and send a copy to your solicitor.

5. Arrange a property survey

Arrange to have a house survey and a valuation done and to get the results before the auction.

6. Financials

Ensure you have a 10% deposit ready for payment on auction day, when the contracts are signed and access to the remaining 90% within 28 days. If you can’t complete within this time you will lose your 10% deposit.

 

When time is critical or if you plan to buy from auction houses regularly as a property developer, independent finance companies such as AtPledge offer quick auction finance services. To bridge any gaps.  Funding is available from £10,000 to £1,000,000 and our decision is made in principle within 24 hours, the funds can be with you in less than 10 days.

 

Plan ahead if you need mortgage assistance. It’s wise to arrange a mortgage in principal with a bank or building society before buying at auction.

7. Preparing for the property auction

When the time comes for the actual auction, be prepared. The process can be quite daunting if you have never been to one before. It is advisable to go on a dummy run and experience an auction as a spectator before going to one to bid. Remember, you don’t actually have to be there in person, you can always bid by telephone.

8. Set a price limit before you bid 

Fix your price limit and complete arrangements for finance before the day of the property auction.

 

Be aware that buying at auction is a binding commitment and carries the same legal implications as a signed contract by private treaty. In most cases, auction offices have copies of legal documentation provided by the seller’s solicitors which can be sent to you.

9. The property auction

When you arrive at the auction, you will need to register, make sure that you bring identification and enough funds for your 10% deposit Auction houses can be very crowded, so get there early if you want a seat. When the time comes to bid, make sure that you can be seen by the auctioneer and that he is aware of you when you’re bidding

10. Bidding

As the bidding increases, so will your heart rate! This is where you have to make sure that you don’t get carried away. Try to have a figure in your head that you don’t want to go over. It can be very tempting to go over budget, particularly if you’ve invested a lot of time and effort prior to auction. If you don’t trust yourself, then get someone else to do the bidding for you.

 

If the property fails to meet its reserve price, the auctioneers can still act as agents and are able to do a deal between yourselves and the vendors at the time of the sale. This is often a good way to pick up a bargain, as a vendor might have been chancing their arm with their reserve price, but could be willing to do a deal after the auction. Likewise, it isn’t unusual for a deal to be completed prior to auction, so it may be worthwhile checking this possibility out with the auctioneers. For more tips & advise follow us on Facebook and Twitter

 

Contact @Pledge

So, what are you waiting for? Go and get a bargain!

Contact @Pledge

*If you’re considering purchasing a property at auction you should always consult with auction professionals and solicitors. This article is intended as a guide only.