The main benefit of buying properties at auction is that you can easily pick up a bargain. Everyone loves a bargain.
The main benefit of buying properties at auction is that you may be able to pick up a bargain – and everyone loves a bargain! However in order to ensure you walk away with the property you want at a price you are happy with you will need to do your research before hand.
Here are some useful steps you may want to consider:
- Locate an auction house and request their catalogue.
- Research into the property before the auction date. If possible, arrange to view the property several times.
- If there is refurbishment work to be done, take a builder or an architect with you so they can provide you with a cost estimation – the repair cost needs to be factored into the purchase price you decide to pay in the end.
- Have adequate finance in place. You need to pay 10% of the purchase price on the day of auction, and the remaining 90% is due 28 days later.
- Find out what the real market value of the property is, and compare with similar properties for sale in the same area.
- Set yourself a maximum bid limit and DO NOT go over this limit no matter the circumstance.
- Check the legal pack provided and seek independent legal advice before hand.
- On the auction date, if the highest bid exceeds the reserve price (the lowest price the vendor will accept for the property) then the property will be sold to the highest bidder.
- However, if the reserve price is not met you may still be able to buy the property by tracking down the vendor (writing to the vendor) or making contact with the vendor through an estate agent who has listed the property. We will talk more about this in another post!