Whether you’re buying a house at auction for the first time or selling at auction for the first time, both can come across as very daunting tasks. There are a number of benefits to both buying & selling at auction but as every person will have their own set of unique circumstances, we’ll leave it to you to figure out the better option. As the title suggests, in this article we will look into the steps on how you can buy a house at auction with the least hassle!
If you’re used to buying or selling properties via more traditional methods such as through an estate agent then most of the auction house process will be totally new to you and may feel hard to get your head around.
It’s not all doom and gloom though. We have put together an infographic outlining the 9 steps on how to buy a house at auction. In addition we will explain each point a little further into the article to make it a little easier to understand!
Step 1: Find an auction house
Finding an auction house is easy but finding the right now for you will take a little time. Search online or in property publications for auction houses in area then look through their portfolio of properties and see if there is anything that catches your eye.
Step 2: Make a list of the properties you’re interested in
This ones simple enough. Look through the properties of the auction house that you’ve decided to go with and jot them down. This just keeps things organised so you can get through the properties faster & easier.
Step 3: Sort out your finances
There is no point in going to auction if you don’t have the money in place for it! Remember you may have to pay additional auction house fee’s aswell! Below are a few key things to remember in terms of finance before going to auction.
- Make sure to have the 10% deposit with you on auction day.
- Remember you must come up with the remaining 90% within 28 days or risk losing your 10% deposit!
- Try to arrange a mortgage in principle beforehand.
- There is normally a £150 (varies between auction houses) administration fee.
- Some auction houses also charge a ‘buyers premium’ fee which can be up to 1.5% of the asking price so be sure to find this out from the auctioneer beforehand.
Step 4: View the properties
Be sure to view all the properties you intend to bid on before auction day. It is recommended to go multiple times to the same property as well because the conditions of a property can change at anytime and it’s not uncommon for home-owners to put ‘quick-fixes’ in place for viewings to make the property look in better condition than it actually is.
Step 5: Deal with all the legal matters
This mainly refers to the legal pack you will receive from your auction house when you express interest in a property. It’s very important to read though this thoroughly and make sure you understand every detail. If you’re unsure of anything, get your solicitor or conveyancer to look through it with you and answer any questions you may have.
Step 6: Get a survey done
As the saying goes, it’s better to be safe than sorry. Be on the safe side and get a home survey done on the property you are interested in – RICS is a great place to start! Auction houses can help you grab a bargain but it’s not uncommon for them to feature disaster properties either.
Step 7: Don’t be fooled by the guide price
Guide prices should be called teaser prices. They are just there to entice buyers into thinking they can grab a bargain. In most cases they are at least 10% below the actual value of the property!
Step 8: Prepare for the big day
We’re nearly there! Below are a few tips for you on how to prepare for auction day.
- Do a dummy run if you’re feeling nervous!
- Ask someone to go with you if it makes it easier for you.
- Get all the documentation you will need ready beforehand (identification, deposit money etc)
Step 9: Auction day
Auction day will come quickly so it’s important to be ready! Try to get there a little earlier so you can get a good seat and wait for your lot to come up. When bidding begins on the property you want it’s important to stay calm and remember your budget. Be sure not to get trigger happy and start bidding more than you can actually afford!
Finally, remember, even if the property you want doesn’t hit it’s reserve, there’s a chance the seller may still want to get rid of it to the highest bidder so stick around if that’s you!
That just about covers our 9 steps on how to buy a property at auction! If you have any questions feel free to contact us and we’ll get back to you as soon as possible!