Auction
- Properties sold at auction is a growing trend.
- Properties are advertised in auction catalogues.
- By registering with the auctioneer regular copies of catalogue are set by email allowing you time to establish properties you might bid for.
- The time from receiving the catalogue and the properties being auctioned is limited to about a month.
- Ideally establish the location and type of property desired before receipt of the catalogue to minimise any delay in previewing properties.
- If you are buying with cash then finance is not an issue otherwise have an agreement in principle in place to finance any purchase(s).
- Normally 10% of the purchase price must be paid on the fall of the hammer. Bank cards are fine. This will form part of your deposit depending on the LTV If the LTV is over 90% (unlikely) you still need to pay the minimum 10% and any excess is recovered by the loan. Conversely if the LTV is lower than 90% then the difference is paid by buyer.
- The balance payable must normally be paid within 28 days. Failure to compel can result in loss of the 10% deposit!
- Visit the property by appointment. The auctioneer will provide an information pack as a guide through the process.
- The property is likely to be dilapidated or suffering from some defect.
- Have a survey conducted the fee lost may be rewarded by avoiding subsidence costs!
- Arrange with a solicitor to have the documents ready in the event of a successful bid. Searches may reveal hidden pitfalls.
- Register with the auctioneer and arrive very early to avoid being stuck in a corridor during the auction unable to bid - they can be very crowded.
- Establish the maximum bid value and avoid exceeding this.
- Do not worry about scratching you nose and inadvertently bidding - you will be given a card with a number to hold up when bidding. The number corresponds to your registration details. Alternatively telephone bidding on the day obviates the need to attend at all.
- The biggest problem having gone to so much advanced trouble is that this develops a commitment to the property. Know when to stop bidding and wait for another deal.
- Guide prices often achieve double at auction, just keep in mind what it is worth!
- Pre and post bidding is possible. Auctioneers will advise how much will secure the deal outside the auction. If the property fails to achieve the minimum reserve price then the seller may be willing to climb down. At the end of the auction buyers sellers and the auctioneer (acting as agent for the seller) may cobble together to thrash out a last minute deal.
Published: 5 November 2013 Last Updated: 17 November 2021