The UK Property Auction Scene

For many seasoned property investors, an auction is a very good way to find below market value properties to add to their portfolio. Most people know that an auction is a good place to snatch up a wide range of properties at bargain basement prices. Some people also go to auctions when they desperately want a property and are willing to pay any price for it. That is why at some auctions, property prices soar way beyond their market value making it more difficult for an investor to buy low and sell high. Still, the perfect property at a good deal can still be found at auctions.

The high cost of housing in the UK nowadays is making it quite difficult for a first-time homeowner to get their foot up the property ladder. This is why buying at an auction is one of the best alternatives for finding a well priced property or a first home. For most beginners, joining an auction for the first time is a daunting experience. Before one sets out to buy their first bargain property at an auction, there is a lot of information one needs to know beforehand. Bringing along a competent advisor or mentor is recommended.

Most properties sold at auctions are those that are quite challenging for an estate agent to sell or have been on the market for quite some time. However, this does not necessarily mean that the property is undesirable or needs a lot of work. Oftentimes, it is because the current owner wants to sell his property right away or that the former estate agent was not doing his job well. Still, it is wise to take an extra amount of caution with you when you go to a property auction. Some properties have defects such as a damp or subsidence, which could cost you a lot of money to restore.

In recent years, a good number of property investors in the United Kingdom have become very interested in auctions. Most of these property auctions can be tension-filled, and apparently this is what UK investors like. Many thrive in the thrill and competition involved in the bidding. Though this is definitely good news for the seller, buyers have to be careful to stick to the maximum price that they are willing to pay. An auction is not a gamble in which one has to raise the stakes higher to remain in the game. Seasoned property investors know when to stop bidding when the price no longer becomes attractive. Sometimes, people become too caught up in the bargain price they are able to get at an auction that they forget to factor in the expenses in restoring and re-selling the property.

A lot of preparation needs to be done before embarking on a property auction. Determine the maximum price you are willing to pay for the property. This should be based not only on the amount you have in hand but also on the profitability of the property and its resale value. Your estimate should include the cost of repairs, renovation, surveyor's fee, taxes, legal fees and other miscellaneous expenses. Also keep in mind that you have to put in a down payment of 10% immediately after your winning bid and that the balance will be expected 28 days later.