Buying property at auction can be an extremely exciting and novel experience. Auctions are an effective and transparent way of purchasing property quickly, without the fear of being gazumped.
But there’s more to property auctions than simply logging in and bagging yourself a property. Here's our 5 top tips for successfully purchasing a property at auction.
When buying a property at auction, it’s essential that you understand exactly how the auction will work.
As a potential bidder, you may be asked to meet certain criteria. For example, room auctions you will need to register to bid. This involves providing identification and proof of finance.
You must also be aware of the financial implications of winning your bid. Very broadly speaking, that could typically involve paying 10% of your winning bid immediately as a deposit, and then the remaining balance around three to four weeks later. The best thing to do is speak to the auction house in advance for advice about the exact mechanics of the auction, so that you are not caught out by surprise.
Our online auction buying guide will also provide you with all the information you need and help get you prepared for the auction.
It’s essential that you carefully research the property you are interested in buying at online auction well in advance so you understand how much you will be willing to pay for it. You should also consider viewing the property as well, if you are able to.
You should make sure you’ve viewed the online catalogue and property details, including legal documentation for the property. Where possible, these legal packs will be available to download from the auctioneer’s website.
Whatever your financial arrangements are, it’s important that you are 100% clear about them well in advance of attending the auction and making your bids. You require proof of finance in order to register to bid, so you must sort these out well in advance.
If you are relying on funding – such as a mortgage – to help with your purchase, you need to ensure that it has been approved in advance.
You should also make sure you are aware and understand of all the additional charges that might apply, most of which will be detailed in the legal pack. As mentioned above, you will need to have immediate access to a figure of around 10% of the maximum amount you are looking to bid.
Once you have done your research and reached a view of what you believe the property is worth to you, use that as the benchmark for any bidding you engage in.
This could be a realistic figure you would like to secure the property for or an absolute maximum amount you are willing to pay if competition for the property is high.
It’s important to not allow yourself to be drawn into a mindset which will result in you paying more than your pre-set maximum and leading you to be liable to pay more that you can afford.
If you have time to do so, it’s a good idea to attend a property auction in advance to see how it all works – especially if you’ve never attended one before.
For many, participating in an auction it is an exhilarating experience and you don’t want to be distracted by the novelty of it all if it’s your first time.
You can watch how people are bidding and their timings so it’s more familiar to you when it comes to placing your bid.