Buying houses at auction – what to look for
2nd Apr, 2014
If you’re a fan of ‘Homes under the Hammer’ on the BBC you’ll understand why buying a property at auction is such an exciting process.
There’s the thrill of the chase, you’ll be bidding against other people, the room will be buzzing with excitement and a genuine bargain can be found as long as you don’t get struck down by auction fever.
Inexperience shows at auctions, that’s why we have created a few tips to guide you through the process.
Find an auction and read the catalogue – Look for auction listings online or ask your local estate agent for details of auctions in your area. Once you find when and where an auction is taking place, get hold of the catalogue for the available properties and go through it with a fine-tooth comb.
Pick your properties – Choose a few properties you like the look of and make arrangements for viewings. This will give you a good idea of the general condition of the dwelling, take somebody with you for advice about building work if needs be and have a survey if you are really interested in making a bid, this should help if you are applying for a mortgage.
Compare the market – Check other properties in the area, look for prices on houses that have sold recently. Get a good idea of how much the house will be worth once it’s repaired if some refurbishment work is required.
Read the legal pack – Auction properties come with legal packs that are full of useful information relating to land searches and other essential details. Be prepared, read this bumper pack thoroughly, if you get confused have a solicitor look over it.
Set your limit – When you enter the auction room set a maximum amount to bid on properties. You might love the dwelling but don’t go above your figure, especially if you’ll be struggling to make the repayments. You might lose out but there’ll be another property just around the corner with your name on it within your price range.
Have the deposit ready – Once you have a bid accepted at auction the house is yours and you’ll need to put a 10% deposit down. The balance will be due within 28 days so make sure you have all your finances in place.
It’s a good idea to try a few dummy runs at auctions before you even think about bidding, test the water and get a feel for auction houses first, then you can make a real killing!