If you’re looking to snap up a bargain in the local area, then buying a house at auction can be a fantastic opportunity. However, buying a house at auction means you can invest in a genuine hidden gem with plenty of potential or a property that is avoided on purpose as it suffers from insurmountable and expensive problems. It’s all about having a strong knowledge before entering the auction room. It can be wildly different experience to the ‘normal’ process of property buying so we’re on hand to give you a better understanding of any issues you may face.
The more information you arm yourself with before buying a house at auction the better. Here’s everything you need to know before heading down to your local auction house.
Before you jump straight in, take some time to research auctioning and try to obtain your local property auctioneers’ catalogue. This catalogue will be packed full of property details, guide prices and viewing arrangements about the properties that will soon be ready to bid on at the auction. See something you like? Contact the auctioneers to arrange a viewing. It is common that these viewings are dealt with at specific block times so you need to be flexible.
Look online for stories of people also buying a house at auction and thoroughly research case studies that will help you get the best understanding of property bidding. Having a solid comprehension of buying a house at auction will make you more confident when it’s your time to bid. You can also ask a surveyor to discuss auctioned properties and their benefits and drawbacks with you.
Before heading to the auction house, we suggest keeping up to date with the auction house you plan on going to as there can often be late changes to pricing of the property. It’s been known that properties have been withdrawn from upcoming auctions completely, so make sure the ones you like from the catalogue are still up an available lot before you go.
You can’t turn up on the day with the intention of buying a house at auction with empty pockets. You’ll need a 10% deposit ready for the payment and when the contracts have been signed, you will need to pay the remaining 90% in the near future. The deposit amount changes per auction house, so check with the auction house before you go. If you’re buying a house at auction with the intention of making it a renovation or conversion project, we recommend taking a surveyor with you to assess the building’s current structural condition.
At the auction itself, you must remember that most of the properties will have a reserve price on them which acts as a minimum amount that the property can be sold for. As with all property auctions, once the hammer has fallen then that is the end of that sale. If you’re lucky enough to be successful and win the auction, the hammer falling triggers the need for you to pay the deposit payment and a buyer’s premium. You have now committed to buying a house at auction and the sale completes usually 28 days after the auction.
As well as buying a house at auction, there are plenty of other property types available. From conversion opportunities through to rundown bungalows and even unused plots, every kind of property can exchange hands at auction; and the dwelling or land can come onto the market for a wide variety of reasons.
There’s a misconception that all properties sold under the hammer must have something wrong with them, but this is not necessarily the case. If you’re considering buying a house at auction, before the auction begins try to gain an understanding of why a particular lot you’re considering bidding for is being sold at auction – the answer may not be the worse-case scenario we assume.
Often auctions are a great way to avoid lengthy and uncertain buying procedures, evade the risk of gazumping and other delays that are commonly involved with buying a property.
When buying a house at auction, we suggest lining up a few experts to provide their necessary professional inputs in good time. Whether it’s a property you can move in to straight away, a plot or a conversion opportunity, it is good to get a professional’s understanding of the site’s suitability and to discuss what you want to achieve with the property.
The idea that contracts are exchanged at the fall of the gavel can be daunting so its wise to complete due diligence before the auction. Consult with a surveyor if you have concerns, they may be able to assist and suggest a specialist that can help.
At Avery & Co, we have years of experience providing independent advice to those buying a house at auction. It’s our job to provide a survey and valuation of residential properties to the highest possible level. Find out more about how we can help you when it comes to buying a house at auction. We provide all our clients with the confidence that we follow correct procedures in all our working practices.
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