Property auctions have always been a good place to look for investment properties and buyers who want to make a profit. However, the auctions are now being sought after by mainstream buyers and other sellers.
Although property auctions are thrilling, they’re not for all people. We examine the mechanics of property auctions, as well as the pros and disadvantages of purchasing a property at auction.
How do property biddings work?
Locate your local property auction online. Or, discover properties for sale via auction portals such Rightmove.
Most property auctions release their listings around a month prior to the auction. This will usually include a guide-price. To view a house that interests you, set up an appointment. You may also wish to visit the property more than once.
Property auctions can be very competitive so ensure you have a mortgage agreement set up, have had a survey of your property completed, and that Conveyancing Counselor has reviewed all legal documents provided by seller before bidding.
Prior to placing a bid, set a price limit and stay within it. Even though you may lose the money paid to surveyors and solicitors this can be a small loss compared with the cost of buying a property that costs thousands more.
It doesn’t always require you to be present in person to make a bid. If you prefer, you may bid over the phone or via proxy.
If you place a winning bid, there are two ways to exchange or complete at auction. A 10% deposit is required by auction houses immediately following an auction. Then you have 28 days for completion. You’ll usually have 56 days to complete the sale if you pay a nonrefundable reserve.
Advantages
Speed – Houses bought at an auction can be completed in 28 days, unlike traditional buying processes that can be slow.
Buy a great deal! If you are looking for something a little more, you will find some incredible deals at auction.
Transparency-On auction day you will be able to see all of the other bidders and not feel pressured to make your bid.
Disadvantages
Make sure you are ready with your money.
Less time for solicitors or surveyors – There is a small window in which to arrange surveys. Also, it’s possible to inspect the legal packet of the properties you are interested. This adds pressure to due diligence.
You may get outbid. If someone is willing to pay more than your budget, you will lose any money you have spent on surveys or solicitors. It is tempting to place a bid that exceeds your budget. However, once the hammer has fallen, there is no return!
Get in touch today to receive advice and/or to view properties you are interested in bidding for.
