Property auctions in the UK are a good place for investors on the hunt for a cheap house or flat to buy. Property auctions are also ideal for people wanting to avoid property chains or those who want a home in a hurry.
This property auction guide explains:-
· What to expect at a property auction house in the UK
· When buying property at auction is a good idea
· Why a trial run is a good idea
· How to put a value to a house or flat at auction
· What to bear in mind on the day of the property auction
What to expect at a property auction house
· You will usually pay a 10 per cent deposit immediately after the property auction. In addition, you will sign the contract in the saleroom
· Take proof of identity, such as a passport, to the auction house
· You are also legally committed to pay the remaining 90% of the property price and complete within around 28 days. If you fail to complete within that time, you will lose your deposit and could be sued for any losses made by the seller.
· Don't bid at a property auction if your purchase is dependent on the sale of another property on which the contracts have not been exchanged.
· On signing the contract at the auction house, you will also be responsible for insuring the property.
· You will have to pay the auctioneer on the day of the property auction.
Property auctions can be helpful in slow markets
If the property market is slow or you have had your house or flat on the market for some time, selling at a property auction could get your property chain going.
Have a trail run at a property auction in the UK before you commit
Your first time at a property auction will be daunting, with crowds, noise and a real buzz. It is best to visit a few before you actually intend to buy a house or flat. It's also important to do your research before you attend a property auction with intent. Familiarise yourself with prices for property types in your chosen location. The Essential Information Group works with over 150 different property auction houses across the country. This online property auction site offers some of the most up-to-date property auction data on the market. Its online auction services include price listings for past property auctions, as well as catalogue details for UK property auctions.
Get a survey done prior to the property auction
Auctioneers' catalogues are usually published three weeks before the UK property auction and provide the dates and times for property viewings. This is the best time to get a survey to find out the true condition and value of a house or flat you are interested in buying at the property auction. The Royal Institution for Chartered Surveyors can help you find a reputable surveyor. The survey may also point out enquiries you should make, specialist reports you should obtain and areas of expenditure for repairs. You should also instruct your solicitor in relation to searches, the title deeds for any covenants or restrictions, and leases.
How to put a value to a house or flat at auction
Ask a chartered surveyor to quote you the maximum price you should pay for a flat or house you intend to bid for so you don't pay over the odds. In the catalogue, you will also find a guide price for each property. Beware - this will be pitched low to entice bids. Remember to take account of additional costs, like fees for professional advice and stamp duty.
Reminders for the property auction day itself
· Make sure you are up to date with any changes to the original details of any property you are interested in - these are often announced on the day of the auction
· Ensure your bid is heard over the noise in the auction room
· Don't open the bidding at the property auction. When you do enter the bidding, make a substantial increase on the previous offer to gain a psychological advantage
· Agree a discretionary bid one bid more than your maximum limit. However, don't get carried away in the auction house frenzy
· Look for signs that the auctioneer has reached the reserve price - he will say something along the lines of "we're here to sell."
· If a property remains unsold, speak to the property auctioneer to register your interest - lots of deals are struck by private treaty at a price agreed with the vendor.