411homerepair.com

Buying a Property at Auction – Why and How

by Mike James on Dec 15, 2016

Whatever you may have seen or heard of property auctions, don’t be put off by thinking they’re only for professionals with insider knowledge of the market. With a little preparation, auctions are a great way to secure ownership of a flat, house or other building, and often at a bargain price too.

Here, is that an expert in the field asks:

Are you looking for a ‘fixer-upper’? If you have the appetite for a home project that involves substantial work but will eventually give you the home of your dreams, an estate agent may not be the place for you. Rather than a property you can move in to straight away, you’ll be looking for the potential to make it your own, focusing on space, location and perhaps architectural features you can work with.

Are you looking for an investment property? If you are considering becoming a buy-to-let landlord, you may wish to create added capital value by buying a large house to convert into separate flats. As you’re planning to get the builders in any way, you won’t be interested in desirable family homes perfectly presented for sale by mainstream estate agents. What you’re looking for is a structurally sound property with plenty of investment potential. You may even want to extend your search beyond residential property – how about an office block, warehouse, industrial building, school or church?

Are you looking to buy property quickly? The usual route of house buying can take an inordinate amount of time, and there’s no certainty that the house is yours right until the moment contracts are exchanged. If you wish to avoid the lengthy process, the dangers of a sale falling through at the last minute, or the risks of being gazumped, you may want to look at buying at auction instead.

A property auction can be a fantastic way to buy property for all sorts of circumstances. Without messing, the sale is agreed as soon as the hammer falls. So, what exactly are the steps involved to make a successful property transaction at auction?

Find a property

Once you’ve done the necessary research to locate a property auction in your area, carefully study the current catalog and identify suitable buildings for you to view. As with any property for sale, you should go and see each place at least twice. Remember that there are only 4 weeks between the publication of the catalog and the auction, so there’s no time to lose.

Buildings for sale at auction are often not in a good state of repair. Especially if you’re thinking of alterations and conversions, it’s a good idea to take a builder or architect with you to assess the extent of the work to be done, which in turn will determine how much you are willing to bid.

Do your research

Don’t just rely on the guide price in the catalog; get a second opinion from a local estate agent and compare the price with that of neighboring properties, to arrive at the true value. Consider having a survey done if you’re unsure of the building’s structural condition. The money spent on this will be lost if you choose not to proceed or your bid is unsuccessful, but at least you won’t be buying the proverbial pig in a poke.

Study the legal pack

When you express an interest in a property to the auctioneer, you will be given a legal pack with important information such as the title deeds, local authority and environmental searches, any relevant leasehold information, a fixture and fittings list and seller’s information form.

Study this carefully! Also at this point, consult an experienced conveyancing solicitor to check that everything is in order and that there are no loopholes or hidden covenants that could turn out to be expensive later on. The principle of ‘buyer beware’ applies!

Have finance in place

If your bid is successful, a 10% deposit is payable on the day of the auction, with the other 90% due within 28 days. If you cannot perform, not only will you lose the deposit but you could be liable for the cost of reselling the property and may have to pay interest until it is sold!

It’s essential that you get all your financial ducks in a row well in advance. Unless you are a cash buyer, have a ‘mortgage in principle’ agreed so that it’s ready to go as soon as the property is legally yours.

Due to the strict financial deadlines, it is highly recommended that your auction purchase is handled with speed and efficiency by a solicitor who has your best interests at heart.

The big day

It’s all been building up to the day of the auction and when it finally arrives, the nerves can kick in. Make sure you arrive in plenty of time and get yourself registered, remembering to bring 2 forms of ID and enough funds to pay the deposit. Get comfortable in a good spot that is easily visible to the auctioneer.

When the bidding starts, make sure that you keep a clear head. Easier said than done – but it’s important not to get caught up in the moment and throw caution to the wind. Set yourself a budget and stick to it! If the auction doesn’t go your way, try to be philosophical about it. There’s always another auction. However, if you are successful, it’s time to break open the champagne. Well done, and many congratulations on your property purchase!

Latest Articles

What are the Advantages of a Metal Roof

Metal roofing is durable and beautiful, allowing a home to stand out from others with conventional tiled roofs. A metal coating can last a...

on Feb 1, 2023

How Much Does it Cost to Install Hardwood Floors

There are specific considerations to make before laying hardwood flooring in your house. The first thing you need to know is that the price of...

on Jan 19, 2023

Home Maintenance Jobs You Need to do This Winter

Winter is the perfect time to get some home maintenance jobs completed. Not only are you stuck inside because of bad weather, but this same bad...

on Jan 10, 2023

Design Tips to Level Up Your Kitchen

Kitchens are the heart of the home. Aside from being where we cook and eat, kitchens can be our workspaces, spaces for relaxation, and - in the...

on Jan 9, 2023

5 Irresistible Reasons for Working with a Realtor

Buying your first home can be a daunting task. If you do not know about the intricacies of the real estate industry, you will not be able to make...

on Jan 5, 2023

Sponsored Articles

Actions

More DIY Articles

5 New Cool AC Technologies that Promise to Cool You Off

There is nothing like the hot days of summer, especially if you reside in a geography where the winters are long and hard. Ironically, that’s when...

HVAC / Air Conditioning

3 Tips for Hiring a Property Manager

Whether you are leasing one property or a high-rise full of condos, getting the right property manager on board saves you time, stress and cash in...

Real Estate / Finance

Everything you Should Know About Metal Rooftops

Metal material has become a most loved alternative for roofing for practically all homes as well as business construction. This material framework...

Roofing / Gutters

The Process of Making Seamless Rolled Rings

You may be looking for newer components for your project. If this is the case, you may want to consider these forged metals for a better outcome....

Construction / Materials

Three Color Trends for this Year

Keeping ahead of the game in interior design is big business, and can often cost big bucks too. At home it is much harder to keep up with the...

Bedroom / Furnishings

Contact Us | Submit Article | 411homerepair © 2023