If you haven’t yet found your perfect property, perhaps you are considering buying at auction. Houses found at auction can be bargains and there are many such gems to be discovered, but there are some points one really need to remember and some due diligence to be done in advance.
Find out how to go about buying a property at auction with some top tips from Edward Swindell from Swindell’s Auctioneers.
1. Have your deposit ready
Buying at auction is a great opportunity to purchase a property that might be slightly undervalued. However, unless you have your finances in place on the day, you may as well not show up. The golden rule is to have your deposit ready for auction day and be ready to enlist the help of a specialist mortgage broker, with experience in meeting challenging deadlines, to see the purchase through to completion.
2. Do your due diligence
Before attending the auction, spend time going through the auction’s property catalogue and reading the small print. Make sure you visit the property that you are interested in and if it is in need of refurbishment, it is sensible to ask a surveyor or structural engineer to accompany you and provide advice on any work that will need to be done and the associated costs to ensure that your figures stack up. But remember: you don’t have to be put off by their caution – that’s their job.
3. Read through all the legal documents
Every property being sold at auction has an accompanying legal pack containing vital documents relating to the sale like title deeds and any special conditions of sale. You may request this from the auctioneer prior to the auction and are free to speak to the auctioneer about any title issues that could affect your ability to secure finance. It is well worth paying the money for an experienced solicitor at this point, if you are unsure.
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4. Don’t get carried away on the day
Set your limit beforehand and don’t bid unless you are sure. Loans are only offered on the valuation of the property and the property price cannot be renegotiated. You must separate yourself emotionally from the property to keep your heart from ruling your head in bidding decisions.
5. Avoid round numbers
This may seem contradictory, but many bidders set their limits in figures ending in ‘0′ or ‘5′, so by thinking outside these round numbers you give yourself the flexibility to add one final bid, which might see the hammer fall in your favour.
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