While property auctions used to be a great way for investors and buyers to find properties to fix up and then sell for profit in the past, they are becoming more popular and appealing to mainstream buyers and vendors.
While property auctions may be thrilling, they are not for everyone. Therefore, you need to be prepared. We’ll take a look how property auctions operate and what the pros are to buying a property at a auction.
How do property auctions function?
Online searches can help you find your local property auction. You may also search for properties available at auctions via portals such Rightmove, Zoopla and Zoopla.
Most property auctions will release their catalogues approximately one month before the auction. These catalogues will include a guide cost. If you’re interested to bid on a property, schedule an appointment and make multiple visits to the property.
Bidding on house auctions near me can move quickly so ensure that you have a mortgage agreement and a building survey done before bidding. Also, that your Conveyancing Lawyer has reviewed any legal packs provided by the seller.
Set a price limit prior to making a proposal and keep it. You may lose some of the money that you spent on surveys or solicitors but this could still be a good deal compared to spending thousands on a home.
You don’t have necessarily to be present to place a bid. In order to do so, you can either bid by proxy or over the phone.
You can exchange bids or complete the auction at any time if you are successful. The auction house will require a 10% deposit within 28 days of the auction. You may pay a nonrefundable reserve on the property and then have 56 days for completion.
Advantages
Speed – Houses purchased at auction are faster than traditional buying.
Great deals – You’ll find great deals at auction if you’re looking to fixer uppers.
Transparency – On auction day, all bidders can be seen in the room. There is no pressure to submit your offer.
Disadvantages
It is important to be ready with your money. If you win at an auction, you will need to pay a deposit. You have only so many days to pay for the entire purchase price.
Surveyors and solicitors are less busy – There is a limited window of time to arrange surveys, and to verify the legal packs for the properties you are interested in. This puts a great deal of pressure on due diligence.
You may be outbid. If someone’s bid is higher than your budget you could lose all of the money you invested in surveys and solicitors. It’s tempting to bid beyond your budget. But once the hammer falls there’s no returning!
Get in touch today if your interest is piqued in bidding on a property or for advice on buying or listing at auction.
