Usually, buying a property is one of the most stressful experiences a human being can possibly opt to ensure, which is probably why buying at auction has become more and more popular. It’s that chance to snap up something for a fraction of the price you can renovate, or something gorgeously unique, your heart fluttering like a butterfly’s wings as you raise your paddle, unsure of whether you will come out on top or left wanting, only to see your oppositions head slink down as they give up and you bag the bargain of the year.
But before you get too excited and think about going down this route for the first time, it’s important to know there are certain pitfalls out there because, let’s be honest, the only thing that will stop you getting stung is knowledge.
So, without further ado, here are our golden rules for buying a property at auction:
Rule 1: Visit The Property
Never go into an auction blind, basing your decision on photos alone because what might look like a spot of damp could be a lot worse. That’s why you need to visit a said property before the auction date - to see what you might be getting into. It might not deter you, but you might have to consider other things, like the cost to repair water damage or fix a sunken roof. If, however, you’re not sure of what to look for, take someone with you who is.
Rule 2: Finances At The Ready
Once that hammer falls, you are locked into and committed to the purchase, which usually has to be completed within 28 days - and possibly sooner - or else you’ll lose your deposit. So make sure you have your finances in order beforehand. But don’t just rely on a pre-approved facility or a bridging loan, have a plan B as well, just in case.
Rule 3: Read The Small Print
Please, read every line of the legal pack, and then re-read it, before bidding on any property or else you might get a major migraine later on. The reason for this is simple: most properties are in the auction for a reason. That means, your role is to establish what those reasons are and then decide if you can live with them.
Rule 4: Fees Are Niggly
If you thought the fees attached to a “normal” property were bad, then you’re in for a shock because the fees at an auction are hiding everywhere and can quickly creep up. There are auctioneer fees, buyers fee, two different types of legal fees (yours and the lender and possibly also the vendor, so read the pack very carefully to find out exactly what is going on), lender exit fees, new finance fees, broker fees, survey fees and more.
Rule 5: Have A Dry Run
If you’ve never done this whole buying at auction thing before, then go along for a dry run and see how it all works. Then, when you are there, pick a couple of properties you like the look of and pretend to bid for them in your head, practising the art of sitting on your hands when you reach your financial ceiling.