If you’ve ever watched the popular TV programme Homes Under Hammer you’ll know where we’re coming from when we say auctions are a place of high tension, excitement and a great place to pick up a bargain – even when it comes to property.
Buying your home at auction is also nerve-wracking of course (thanks to the large sums of money involved) so it’s as well to attend several auctions to understand the process before you even think about putting in a bid.
People (mainly developers) buy at auction because it’s a great way to pick up a Below Market Value (BMV) property. This is usually because the house or apartment has been repossessed by a bank or building society who is seeking a quick sale, or because the property needs a lot of work to done to it.
The benefits of buying at auction
If you have the time and are prepared to put in a lot of work then this can be a fantastic way of picking up a bargain home and really making it yours by doing all the renovation yourself.
It’s a quick way of buying a home without any messy legal action or gazumping. Once the hammer goes down and you pay a deposit on the day (usually 10 per cent) and, provided you pay the remainder within 28 days, the house is yours. It’s as easy and straightforward as that.
Where to find a property auction
Auctions are typically advertised in trade (property) magazines and maybe even local estate agents. You’ll also find a handful of online auctions sites such as propertyauctions.com
How to bid for your home
The sale is made on the day so it’s essential to go and look at the property before the day of auction. Get a survey done too if you really like it to ensure there are no nasty surprises awaiting you at a later date. It’s also worth getting a solicitor to run through the conditions of sale documents beforehand (again, to prevent any heartache down the line).
You can pay the initial deposit with a cheque or bankers draft. There will also be an auction house admin fee of up to £300. Be aware that if you can’t pay the total cost of the property within 28 days the sale will fall through and you’ll have to pay for it to be resold at auction.
On the whole auctions can be a great way of picking up a property – providing you do lots of research beforehand and get expert opinion before bidding. Set yourself a total price you can afford and don’t be tempted to go above it. Good luck!