Auction Bid

14 Things You Need to Know about Buying a Property at Auction

Have you ever thought about buying your next home at auction? Auctions are a great way to avoid lengthy and uncertain buying procedures, and bag a bargain. We have put together some key essential points to consider, to help you buy your dream property at auction.

Before the Auction

1

Decide on the area you’re interested in and contact the local auction houses.  They will be able to advise you on any upcoming auctions and add you to a mailing list so that you receive the latest auction catalogues.

2

Check that the auctioneer is a member of NAVA Propertymark; this means that during the process, you can feel safe in the knowledge that you are dealing with a qualified professional. 

3

Once you have spotted a property (or two) that you like, contact the auction house to arrange a viewing. Make sure to thoroughly inspect it and its surrounding neighbourhood. Consider taking a builder or handyman with you to find out what may need doing to the property, and how much it is likely to cost. If you have any queries, don't be afraid to ask the auctioneer.

4

Obtain a copy of the auction particulars from the auctioneers. This may already contain certain key information or a separate legal pack may be available. Searches are often included in the legal documents, but if they're not, ask your solicitor to do them before the auction. Legal documents can vary from one property to another so consider asking a solicitor to look over the legal pack for any hidden covenants or loopholes that could end up costing you more than you bargained for.

5

Whilst it is important to take your time considering any property, there is usually only four weeks between the publication of the auction catalogue and the auction, so you will have to act fast.

6

You can always ask the auctioneers to keep you informed of any alterations or amendments to the sale conditions (an 'Addendum') and if you are really keen, ask them to let you know if there is any possibility of the property being sold before the auction date, as this has been known to happen.

7

Think about the maximum price you are willing pay for the property, whilst auction properties may be cheaper than market value, renovations are usually needed. Unless you're lucky enough to be a cash buyer, you will need finance in place before bidding. Make sure you know how much the deposit will be and check which method of payment is required so you can arrange for sufficient funds to be available.

Armed with all this advice, it’s time to head to auction!

At the Auction

8

It is advisable to arrive at the auction well before the advertised starting time. Any additional information or changes to a property will be available in an 'Addendum' or will be announced by the auctioneer before the auction starts. Make sure you are aware of any alterations as they could have a bearing on your decision to buy the property.

9

Be aware that each auction property is initially offered at a guide price and is also subject to a reserve price. The guide price is the starting price at which bidding will commence, whereas the reserve price is the minimum figure the seller will accept. The reserve price is not disclosed to bidders but can be up to 10 per cent higher than the guide price so bear that in mind when bidding.

10

When the time comes, make sure your bids are clear. It is easy to get carried away but try to remain calm and within your set budget. The auctioneer should make it quite apparent where and what the current bid is in the room.

11

If you don’t want to bid personally, someone else, such as an agent or a solicitor can bid on your behalf. Some auctioneers will also accept telephone or proxy bids, in which case the auctioneer will require written authorisation from you and a cheque for the deposit (this is calculated on the amount of your maximum bid).

12

If your bid is successful, you will be required to sign the contact and pay the deposit there and then. At the fall of the auctioneer's gavel, you will be bound by the terms and conditions of the sale and liable for the insurance of the property from that moment. Pulling out of the sale after this could result in huge after costs.

13

Most auctions require a 10 per cent deposit on the day and will require two forms of ID. You then usually have between 14 days to six weeks to complete and pay the remaining balance of the purchase price. Any outstanding costs and completion details will be clearly stated in the conditions of sale.

14

In the instance that a property remains unsold, the auctioneer may have the authority to sell it privately in the room immediately after the sale. Make sure to register your interest with the auctioneer prior to the sale and stick around at the end of the auction.

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