How To Buy A Property At Auction

Attending a property auction can be an exciting way to find your dream home or make an investment. To ensure a smooth and successful experience, follow these steps:

Research Properties and Auctioneers

Find the area you’re interested in and contact local property auction houses for upcoming auctions. Request to be added to their mailing list to receive the latest catalogues.

Arrange Viewings and Ask Questions

Schedule viewings of properties you are interested in to thoroughly inspect them. Bring a builder or handyman to assess potential repair costs. Don’t hesitate to ask the auctioneer any questions you have about the property.

Driving past the property at different times of the day, evening or at a weekend will give you an idea how the area is used by local residents and can highlight unseen issues such as parking or access.

Obtain Auction Particulars and Legal Pack

Get a copy of the auction particulars, which contain important property information. Request a separate legal pack from the auction house and have a solicitor review it for hidden covenants or loopholes.

Conduct Searches

If the legal pack doesn’t include searches, have your solicitor perform them to identify any risks associated with the property.

You will have to pay for the searches and if you are not the winning bidder, then there is a high chance your search fees could be lost.

Written in August 2023 by:

Sam Chester

Before Auction Day

Act Fast

Auction timelines are typically short, so be prepared to act quickly once you find a property of interest. Most will want you to exchange within 28 days and to complete within a further 28 days.

Stay Updated

Request updates from the auctioneers on any changes or amendments through an Addendum. Ask about pre-auction sales, as the property might be sold before the auction date.

Set a Budget

Determine your maximum bid, considering renovation costs, and ensure you have financing in place. Avoid temptation to exceed this as it may lead you to becoming financially overstretched. Once the hammer falls, you have agreed to purchase the property.

Understand the Terms and Conditions

Familiarise yourself with the auction house’s terms and conditions, including payment methods and deadlines. Read the small print very carefully before bidding.

On The Day of The Auction

Arrive Early

Being punctual is key to making the most out of the auction. Arriving at the venue ahead of time allows you to scope out the surroundings, find your bearings, and get familiar with the auction atmosphere. Moreover, staying aware of any last-minute changes or announcements made by the auctioneer can provide you with a competitive edge.

Know Guide and Reserve Prices

Familiarise yourself with the guide price and the reserve price for the properties you’re interested in. The guide price serves as an estimate and provides an indication of the property’s value, while the reserve price represents the minimum acceptable amount set by the seller. Understanding the difference between these two figures can help you gauge the potential value of the property and make informed decisions during the bidding process.

Make Clear Bids

When the auction begins, it’s crucial to communicate your bids clearly. Using a paddle or enlisting the services of a representative, such as an agent, solicitor, or proxy bidder, can streamline the process and ensure that your bids are accurately recorded. This approach also allows you to stay composed and focused, even during the excitement and pressure of the auction room.

Successful Bid

If your bid emerges victorious, congratulations! However, the journey doesn’t end there. Be prepared to take swift action, as successful bidders typically need to sign the contract and pay the deposit immediately after the auction concludes. Familiarise yourself with the auction’s terms and conditions to avoid any delays or complications in the post-auction process.

ID, Proof of Residence and Deposit

Prior to attending the auction, ensure that you have two forms of identification prepared, as this is a standard prerequisite for bidder registration. It is advisable to bring a valid proof of address as well, in case it is needed. Moreover, familiarise yourself with the deposit and payment terms linked to the auction. Being aware of the required payment amount and acceptable payment methods will assist you in preventing any financial issues.

Unsold Properties

In some cases, a property may not receive any bids during the auction, and it remains unsold. If you are interested in a particular property that falls into this category, take the initiative to express your interest to the auctioneer. They may be open to discussing the possibility of a private sale, giving you another chance to negotiate the purchase.

By following these steps and tips, you can be well-prepared for a property auction and increase your chances of a successful purchase. Remember to do your due diligence, research the properties thoroughly, seek professional advice when needed, and stay informed about market trends and regulations. Armed with this knowledge and readiness, you can confidently navigate the auction process and make well-informed decisions as a bidder. Happy bidding!

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Attention Please!!!

The content within this article is as accurate as the date it was written. To ensure the most up to date information, you should consult with one of the experts that we work with as every lender and their polices are different and can be changed or amended without notice.

This website is for information only and does not constitute financial advice. Our mortgage advisers are all fully qualified to provide mortgage advice in accordance with the Financial Conduct Authority (FCA) regulations. We only exclusively operate with businesses that are authorised and regulated by the FCA. All advice offered will be unique to your individual circumstances.

Some Buy to Let mortgages are not regulated by the FCA. You should carefully consider securing other debts against your home. If you do not keep up your mortgage repayments, your home may be repossessed. Equity released from your home will also be secured against it.