Buying at auction is becoming increasingly popular and over 30,000 properties (8% of all properties sold in the UK) are sold in this way a year. If you want an unusual property or one that needs renovation, this route can offer some good bargains, especially in December, when most other people are busy spending their money and time on Christmas.
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| Try not to get carried away in a bidding war. Decide
the maximum you are willing to pay for the property – and stick
to it! |
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Although you may find yourself a bargain, do bear in mind that many properties sold at auction are those that are difficult to sell or need serious renovation - and so you should make sure that the price you bid reflects this, taking into account the cost of any necessary work. You must know what you're doing, otherwise you can end up paying far more than the property is worth.
There are several advantages to buying at auction; in addition to being a quick way to buy a home, with no chains, you can often save money and there's no possibility of being gazumped. However, there are disadvantages too. As you must commission your survey and carry out legal checks on the contract and title before the auction, these costs will be wasted if you're out-bid.
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| Remember, the normal rules of commissioning surveys
still apply when buying at auction. So if you’re planning to
bid on an old (over 50 years), large (over three stories or 200 m sq),
or unusual (thatched, timber, etc.) property, or you plan to carry
out major alterations such as converting or extending, you should have
a full structural survey. |
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Guide prices are often very conservative, so that they attract as many potential buyers as possible. The actual selling price is often much higher than the guide price - often over double. The reserve price is the lowest price the vendor is willing to accept, and if no-one bids above it, the property will remain unsold. When bids pass the reserve price the auctioneer will announce that a property is 'on the market' and will be sold.
You should try to attend a few auctions before bidding, so that you can familiarise yourself with the procedure. Remember that you will need to have the purchase contract and title checked by your solicitor; obtain a valuation or survey, and arrange a mortgage before you go to bid, although vendors will usually provide a legal pack containing the title deeds, leases, planning permission, searches, special conditions of sale and other information.
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