Buying property at auction

Buying Property at Auction


Buying a property at auction can be advantageous, but make sure you follow our hints and tips before raising your hand on sale day:

Know Your Requirements
Be sure that you are certain about the type of property you want, and what you’re going to do with it once you get it. This is particularly important if you are buying a building plot or a property requiring improvement.

Do Your Research
Make sure that you undertake regular searches on the relevant property websites and read the local press. This will help you find out what’s available, and will give you an idea of what prices the sort of properties you’re looking for are reaching.

Do Read the Catalogues
Not only do auction catalogues give you specific details of properties entered for sale, but they will also contain details of any common conditions of sale, bidding requirements, and any administration fees that might be applicable.

View the Property
It might sound like an obvious thing to say, but some people do buy “blind”, which is a risky business. If you can, then view early in the marketing process – this will give you time to go back with a builder if required or to arrange a mortgage valuation.

Surveys and Legal Documents
Do consider getting a survey done, even if you don’t require a mortgage. Properties offered at auction are not always in the best condition. It is also important to involve your legal advisor when considering an auction acquisition. Legal Packs, Special Conditions and Searches should be available 7 – 10 days before the sale date, and advice from your solicitor could affect your decision on how much or whether to bid at all. Remember – on the fall of the hammer you are legally obliged to complete the sale and it will be too late to change your mind.

Auction Finance
If you need to arrange finance then leave yourself plenty of time before the sale. You will need 10% of the hammer price available on the day (subject to a minimum on lower value properties), and the remainder usually within 28 days. It is also essential to contact your insurers as you will be liable for the insurance of the property after exchange of contracts.

On the Auction Day:

– Check that the property you’re interested in hasn’t been withdrawn

– Arrive in plenty of time to check for last minute changes to legal packs

– To register as a bidder and obtain your bidding number. You will usually need two forms of identification with you, check the relevant auction catalogue to find out what is acceptable.

– Check that the property you are interested in has not been withdrawn and check that there are no last minute changes to the legal packs.

– Last minute changes will be made via an addendum – if you have any queries make sure you ask these before the sale starts as the auctioneer may not allow questions once the sale is underway.

– Make sure that your bidding is clear, and if you wish to bid a different amount than being offered then don’t be afraid to shout it out.

 

After the Fall of the Hammer
At this point, the sale is legally binding. You will probably be asked to wait until all lots have been sold before you can sign the contract and pay your deposit.

To find out more about our auctions or for a free valuation please contact our dedicated team on 01502 407427 or email propertyauctions@durrants.com.

Auctioneers gavel

The Advantages of Buying Property at Auction

There are many benefits to taking the plunge and buying at auction:

Speed and Certainty
From the moment the property you’re interested in comes on the market, the timescale to when it might belong to you is clear. There is an advertised date of sale, and as such you can gear yourself and your advisors accordingly.

On the day of sale, if you are the successful bidder when the hammer falls, you will exchange contracts and the property will be yours without the risk of re-negotiation and gazumping – you will exchange contracts on the day, and take possession of your new property usually within 28 days.

Opportunity for a Bargain and Value for Money
Even with the scale of the marketing that is undertaken, auction sales can still offer the chance of a bargain. Given the opportunity to acquire a building plot or property requiring improvement, there is considerable potential for you to add significant value to your purchase and generate re-sale profit.

You may also find that you buy a property for less than you were willing to bid up to. Remember, you only have to be one bid ahead of your competitor to get the reserve price and be successful in your purchase.

No Hidden Surprises
All the Searches and Legal Packs will have been available for inspection 7-10 days before the auction – everything will be clear and in the open, allowing you to be fully informed before making your bid on auction day.

Open to Public Scrutiny
Everyone has a fair chance at auction and the process is open to public scrutiny. The majority of properties entered into auction are sold under the hammer, but this should not put you off putting in a bid pre-sale if you are determined to buy a particular lot.