Buying a Property at an Auction
Buying a property at an auctions has many benefits, not only could you find yourself a home or investment at a bargain price, but you also cut out all of the delays and pitfalls that are associated with the traditional ways of buying a home. With the savings and the fewer time delays and problems, buying at an auction can be very appealing, however, you should know what you are getting yourself into before jumping in feet first, especially if this is the first time you’re buying at or even attending an auction.
Do your research first. Make sure you go to a few auctions with no intention of buying anything, start to understand the process and the jargon that they use. Speak to people at the auction and who you know have bought from an auction, ask questions and learn as much as possible from their mistakes. Decide which auction you are going to be attending and get a catalogue, this will detail the properties for sale and information about them such as conditions of sale, photographs, descriptions and a price guide. Look through the catalogue and choose a property (or two) that you like, research these properties and if possible arrange viewings. After seeing the property(s) and if you are interested in bidding on the property at auction, you will need too:
• Ask your solicitor to look at the catalogue and the terms and conditions, they will ensure all searches and enquiries regarding the property are made. Legal packs will be sent from the buyers solicitors to yours, which will include things like title deeds and any special conditions to the sale.
• If you need a mortgage to finance the purchase of the property you will need to get the house valued before the auction, you have up to 28 days after the auction date to pay the full costs of the house (minus any deposits paid on auction day).
• Ensure you have a deposit ready for auction day. The deposit will typically be either 10% or a minimum payment that has been put in place by the auction house.
• Decide how much you are willing to bid on the property. Take into consideration other fees such as solicitors fees, survey and valuation fees, moving costs, stamp duty and insurance when deciding on a figure to ensure you keep within your budget. If the house will need renovating and this is to be done by you, ensure you take the costs of doing this into account.
If a property is listed as ‘unless previously sold’ in the auction’s catalogue, it means that the seller may agree to sell the property before the auction date. If this is the case with a property that you like and you are in the position to put in an offer before the auction date, make sure you do. If you decide to leave it until the auction day, the property may have already been sold, or may be sold at a higher price than you are willing to go, but a price that may have been previously accepted if made before the auction date.
On the day of the auction call the auction house to make sure the property is still being sold. If you cannot get to the auction house, they may allow you to bid over the phone or online, so discuss this with them when you call.
At the auction house, register your and your solicitors details, you will be given a bidding number. When your property is being auctioned, make sure you are in a position to be seen, if you want to bid gesture with a raise of the hand or a clear nod at the auctioneer
The initial paperwork is signed after the auction and the property becomes yours completely within 28 days.