Property auctions can be a great place to pick up a 'bargain', whether you are looking for a home or an investment.
As well as being a quick and relatively hassle free way to buy a home, no driving around viewing endless houses, no negotiations, and no last minute fall through if the house sellers get a better offer, the auction process is easy. You simply look through the auction catalogue, find a property you like, arrange a viewing and do some research, and show up prepared on auction day.
However, buying at a property auction does require careful planning. Thousands of properties are sold at auction in the UK every year – and many are BMV (below market value), meaning there are plenty of bargains to be snapped up. So, remember to do your homework carefully – unlike buying through an estate agent, you cannot change your mind if you later discover something bad about the property. It is your job to find out everything that you can before the auction begins.
It's important to view a property prior to bidding at auction, and with that in mind our viewing checklist can help you to remember all the relevant questions that you will need to ask.
In essence, there are three steps to successfully buying property at auction, which are:
Preparation: The research you should do, and arrangements to make before you go
Know-how: Making sure you understand how auctions work
Auction day: What to do when you get there
Before the auction make sure you have the following information to hand:
• Lot number
• Property description
• Guide price
• Important notice to bidders
• Memorandum of sale
• General conditions of sale
Other procedures you need to be aware of:
• ID requirements
• Paying the deposit and payment method
• Signing the memorandum of sale
• The responsibility of insurance for the property
The guide price is simply the auctioneer's indication of what property might reach and it will usually sell above this mark. The guide price is not to be confused with the reserve price that is the lowest price the vendor will accept. And, remember, the guide price can change at any point, so keep in touch with the auctioneer right up until the auction day itself. On the morning of the auction (or last thing on the day prior to the auction) it is worth calling the auctioneers and checking that the property your wish to bid for has not been withdrawn or already sold.