5 Things to Remember When Buying a Property at Auction
Buying a property at auction can appear to be offering great value for money and it can often be a more appealing way of purchasing a home. With the right professional help beforehand buying at auction can save time and money so if you are considering this method, there are a few things you need to know before making a bid.
In addition, buying a property at auction can offer a more affordable way of getting on the property ladder or moving on from your current home. That’s if you are prepared to put in the extra effort beforehand – which is highly recommended as a successful bid means going ahead and buying the property.
Property auction conveyancing is very different from the standard buying and selling process. When an auction property is going, going, gone! as soon as the hammer falls the person with the successful bid enters into a legally binding contract to buy the property, regardless of whether the small print, amount of renovations needed, legal title and other queries have been sorted out beforehand.
So here is a 5-step plan to consider before you venture into the often daunting but stimulating world of buying a property at auction.
1. View the property first
If you see a property come up for auction that takes your fancy we suggest visiting it in person before making a bid. You should really do this at various times of day, to make sure it really is the right choice for you.
This will also give you an opportunity to match it against the description given to you by the agents, to ensure it is how it appears in the listing.
Remember, you probably intend on living in this property, so if it needs a lot more work than advertised, that could affect your plans.
Also, do you really have the time (and money) to start knocking down walls or adding a new kitchen? Here’s what to do if you are on a budget.
2. Do your research
When making your first foray into the world of buying property at auction always equip yourself with as much knowledge as possible before making a bid on a property.
This includes everything from signing-up to mailing lists of auction properties in the area you are looking to buy – here is a list of auctions in the North West – as well as browsing the internet to look at things like crime levels, local schools and parking restrictions or even downloading the legal packs of properties that catch your eye.
3. Stick to your budget
When bidding at auction you may feel pressed to spend more than you intended, but remember:
- Never bid beyond your means.
Your budget is there for a reason, so avoid letting your emotions get the better of you – work out how much you can afford (including a contingency) and stick to your limit.
4. Ensure you have the right mortgage
There is no point bidding for a property unless you have the funds to pay for it so make sure you have a mortgage arranged where the lender can complete within 20 days, which is a requirement of the auction process.
Also, it is worth remembering that you will be required to put down 10% deposit for your property on the day, so as well as being sure you can afford the home you are bidding on in the long-term, you will also need immediate access cash too.
Bear in mind that a bad title can also result in not being able to get a mortgage so our advice is to get a title report before considering buying at an auction.
The process moves fast – the completion date is usually within a month following the auction.
5. Talk to a reputable conveyancing solicitor
It is important to find a reliable and reputable conveyancing solicitor who has experience of buying a property at auction.
Your conveyancing solicitor will be able to prepare or examine the legal pack to ensure that the property is not unmarketable and there are no problems which may cause issues either after the auction, or when going on to sell the property later.
Getting ready to buy at auction
- Visit the property to make sure it is exactly what you want.
- Make sure you have finance in place beforehand.
- Instruct a solicitor before the auction to avoid unnecessary delays (a solicitor can also prepare a pre-auction legal pack which includes checking the legal title).
- A solicitor can act as your legal representative at an auction.
If you do want to buy a property at auction when you’re ready to go, please get in touch with. Email us today at [email protected]