Property auctions are fast-paced, exciting events that are bound to get your heart racing, whether you’re buying, selling or just along for the ride. Whilst for many this is a thrilling experience that is nothing but enjoyable, this more often than not comes with some inevitable nerves and trepidation. If you’re a first time auction buyer we want to put your mind at rest, and give you all the information you need to make your first time auction experience nothing but fun.
If you’re buying at auction there are a few things you should know. Buying a property at auction can be financially beneficial in so many ways, as long as you bid smart. Contrary to popular myth, not all auction properties are irreparably run down or caught up in legal problems. Most are normal properties that can also be bought and sold through traditional routes, it’s just that the sellers prefer the swiftness an auction provides.
Arm yourself with knowledge
There is no such thing as too much knowledge. Know the kind of property you’re looking to buy. Browse the auction catalogues and try to view the property at least once before auction day. The viewing process will usually start 3 to 4 weeks prior to the auction date so there’s plenty of time.
A very important element of the process to bear in mind is the legal pack for the property. Each property will have its own specific legal pack which is published online and should detail any legal issues the property has had, such as issues with the title or insurance, or things that a buyer should be aware of. The legal pack should also detail exactly what you’re buying. For example, it will make clear if you are buying a property with vacant possession or taking on any existing tenancies. The legal pack is also key in working out if you can actually afford the property or not. You may be expected to pay more than just the price of the property; fees can include conveyancing costs, survey fees, stamp duty land tax, buyer’s premium, as well as the seller’s legal costs, search fees and auction fees. The Special Conditions document contained within the legal pack will detail which of these you are expected to pay. It is always recommended that you take legal advice from a lawyer or solicitor to ensure you aren’t caught out by any fine print or legal jargon.
Try to talk to anyone you know who has bought at auction before, and pick their brains for information on the process. Another great way to familiarise yourself with the process is to attend an auction without bidding, just to get a feel for the way it works.
On the day
Bidding can be an exhilarating process for good and bad reasons. To make the bidding experience exciting rather than terrifying there are a few things worth knowing. It’s really important to remember that the final bid and the fall of the gavel at a property auction are legally binding. Before you get involved in the bidding process, be 100% sure that this is the right property for you.
Having the correct financial backing can help ease bidding nerves. Try and have a mortgage agreed in principle, before attending the auction itself. This will help you to set your budget, so you don’t bid too high, bid with confidence, and get the deal done quickly if your bid wins. You need to find a mortgage that can be approved within 20 working days as this is usually the requirement for most property auctions.
Stick to your budget! This cannot be stressed enough. Whilst the bidding process is a fast-paced, high-pressure environment, don’t feel obliged to spend over your means. The budget is there for a reason and if you bid too high, you may not be able to put down the money for your 10% deposit.
Buying at auction is a great way to bag your ideal property, as well as a great way for lots of first time buyers to get a foot on the property ladder. Follow these tips for a smooth, rather than scary, auction experience.
Austin Gray is an established, multi-disciplined firm that have been holding property auctions in Sussex for over 30 years. We have teamed up with the Auction House group to expand our coverage throughout Sussex and offer our clients national coverage when they decide to instruct us. For more information about our property auctions don’t hesitate to phone us on 01273 201980 or email us at firstname.lastname@example.org