Advice for Buying a Property at Auction

Buying property at auction is a pleasant change from the conventional methodologies but at the same time it is equally important to carefully bid property at an auction. There are few basic guidelines to consider when buying properties at auction. Before getting started search for appropriate auction house listing properties you are interested in and request for their catalog. Auction houses generally organize regular auction sales with printed catalogs few weeks in advance. Subscribing to catalog mailing list is another option. This will give you an overview for the motive behind the property is being sold and the mortgage details of the property. Read the catalog carefully and go through each and every detail provided. Mark all the properties you are interested in buying.

It is always recommended to attend an auction as an observer to get the real feel and to understand its modus operandi. Request from the auction organisers for the auction pack and the auction you have decided to attend. The auction pack encloses information like the title deeds, seller’s information form, local authority and environmental searches, lease details in case of leasehold property. In addition to the legal checks it is important to visit the property in person. Research on the property intensively and inquire through neighbors and local estate agents. Hire a qualified property advisor to carefully examine the property for spotting structural problems. After you finished the survey of the property crosscheck with the descriptions provided in the catalog.

The next step involves carefully planning the accurate costs. It is important to consider additional costs as costs of survey and legal advice, finance arrangement fees, stamp duty, remodeling and renovation costs, buyer’s premium if any. These costs if not considered might consume most of your margin and in worst cases you might end up paying from your own pocket. Carefully read all the contract and auctioneers terms and conditions mentioned in the catalog. Minutely examine all the details or seek legal advice from a solicitor or a chartered surveyor. Get the money required for deposit arranged in advance. You are required to pay 10% of the cost of the property on the auction day when the contracts are signed and remaining balance to be paid in full within 28 days. If you need mortgage assistance it is wise to plan ahead or you might end up losing the 10% deposit in event of non-payment of the required amount within 20 working days.

Allocate a fixed budget for yourself before entering the auction room. Be firm and decisive on how much you are willing to spend and do not get carried away by emotions in heat of the moment. You can also appoint an auctioneer or a solicitor to do the bidding for you. On the actual day arrive well in advance and get a nice seat for yourself so that the auctioneer can easily acknowledge your bidding signal. Keep your eyes open to your surrounding and carefully listen to the opening announcements. You are also required to carry a couple of identification papers and a cheque to cover the 10% deposit.

Buying a property at an auction can be fruitful if you sincerely follow the basic strategy. You might end up buying the best property at almost nominal price.