Auctions are a great way to grabbing a bargain, whether this is for living in or for investing. Residential property auctions can be a little difficult to navigate through and can often be confusing. In this article, we will go through some helpful tips to help you bag your next property at auction.
Before The Auction
Research The Properties & Auctioneers In The Area You Are Buying
It is always best to decide on the area you want to buy and contact local auction houses. They will be able to keep you informed and added to the mailing list so you receive the latest properties.
Arrange Viewings & Ask Questions
Once you have found some properties you like, contact the auction house and book viewings. Be sure to thoroughly inspect the property and neighbourhood as this could be a deal-breaker. It is recommended that you bring someone like a handyman so they can advise how much it will cost for a renovation.
Ask For Auction Particulars
The particulars contain key information regarding the property and it is best to also ask for a legal pack so that you have the best picture. It is also wide to ask a solicitor to look over the legal pack to see if there are any loopholes that can be bargained for.
Prepare To Act Fast
There are usually only 4 weeks between advertising the property and the auction so it is best to get everything together before this. It is worth mentioning that it is also important to be 100% sure about the property before the auction.
Ask To Be Kept Informed
It is wise to ask the auctioneer to keep you updated on any alterations to the sale conditions as this will help to decide whether you are committed to the property. If you are, then you could ask the auctioneer if there is a possibility of buying the house before the auction.
Set Your Budget
Setting a maximum budget is vital to stay on track to make a profit. Although auction properties are cheaper, they are likely to need renovation which can be costly. It is best to have finance in place for this so you can budget as best as you can. It is also best to have the deposit in place.
At The Auction
There may be changes on the day so it is best to arrive early to prepare for this. It will be on the addendum and will be announced before the auction so it is key to be there early.
Understand Guide & Reserve Price
Guide Price – The amount the property is stating its bid at.
Reserve Price – The Minimum amount it will sell for. (This isn’t shown but can be 10% above guide price)
Make Sure The Deposit Is Ready
Most auctions require 2 forms of ID and a 10% deposit ready on the day. You will then have between 2 and 6 weeks to pay the full amount. The rest of the information will be on the conditions of sale.
You May Be Able To Buy The Property If Not Sold At Auction
If the property hasn’t sold at auction, the auctioneer may have the ability to sell it after the auction. It is best to express interest before the auction and stay around after it to speak to the auctioneer.