Our Top Tips for buying at Auction
Your dream house at a knock down price? Sound tempting? Auctions can often be a wonderful place to pick up a sound property investment, there will often be auction “horror stories” in the news so doing your homework ahead of time can really pay off.
If you’re considering buying at auction what can you do to protect yourself? Here are our top five tips:
1. Check out the auction pack
Prioritise contacting the auction house for a copy of the auction pack for the property you’re interested in. This can contain vital information including the property’s legal title, relevant searches, an assessment of the property’s energy performance rating and important information known by the seller. Read the pack from cover to cover and appoint a suitably qualified solicitor to check it for you. They will be able to advise you on whether any further checks or searches need to be made to make sure the property is free from legal defect. Buying at auction’s perfect if you want to secure a quick sale but this also means that if you place the winning bid you are legally committed to buy the property. This means it’s essential to ensure the title is free from defect before you bid
2. Visit the property
Arrange to visit the property and get a professional surveyor to carry out a detailed survey. The onus is on you as buyer to make sure the property is right for you and when the auction’s over you’ll have to accept the property in its current state even if you later find that there are defects
3.Get your finance in place
You’re legally committed to buy when the auction hammer goes down, so it’s essential that you have finance in place before auction day. If you don’t have the right money in place to complete you could lose your deposit and be liable to make a financial settlement to the seller. Make sure you plan well ahead if you need a mortgage. Contact the bank and explain your situation. Get them to provide a mortgage offer in time for the auction as completion on the sale of an auction property must usually happen within around 20 working days.
4.Get a feel for the auction room
Visit an auction before you intend to commit to buy. It’ll give you an idea of how the auction works without the pressure to bid on the property you love.
5. Stick to your budget
It’s easy to get carried away in the frenetic environment of the auction room. Do your research ahead of time on likely values, set yourself a realistic budget and stick to it.
For more information, please get in touch with our property team.