Our top tips for buying property at auction

On average, between 18,000 and 20,000 residential properties sell at auction each year. While this only equates to around 2.2% of total UK home sales, the benefits of going under the hammer are for all to see. Certainty and speed are the most celebrated plus-points amongst auction fans as Rightmove details:

“If you bid and win, you’ve won. There’s no gazumping or gazundering; the property is yours and you can take ownership normally just 28 days later.  That means you can plan your move and know that things are going to happen when they were meant to happen – rather than being stuck in a dreaded chain!”

The fact that you can still finance with a mortgage when purchasing property at auction is another major tick for this often-unexplored method of buying.

Buying at auction is also well known and much loved for its variety, transparency and value for money. You can however only realise these perks – and avoid the cons of auction buying – with the following tips…

Watch and learn by attending an auction or two

If you’re new to purchasing property at auction, we suggest attending an auction (or two) before going to an auction and committing to buy. It can really help shake off those nerves! You’ll also get to know how the whole auction process works, which will give you more confidence when the time comes to bid for your very own piece of real estate.

Remember, auction buying deserves just as much prep

While known for its speed, a property bought at auction deserves just as much consideration as one purchased through an estate agent. You should study the provided auction catalogue in detail before making a shortlist and arranging property viewings.

Viewing an auction property may be a lot different to what you are used to, with vision certainly needed in cases where properties are in a particularly poor state of repair. Seeing past the problems could mean you bag yourself a real bargain though!

If you are new to auction buying and/or not a trade professional, taking along some company is recommended. A builder or architect will be able to advise you on the basics during this early stage to minimise risk and avoid any nasty surprises. Getting a survey before you bid is another must that so many fail to undertake. It could save you a lot of heartache in the future however.

Cast your eye further before budgeting

Making provisions for any repair or renovation work will only be part of your budget. You’ll need to establish how much you’re willing to pay for the property itself. While it’s normal that the purchase price surpasses the guide price set by the seller or auctioneer, paying over the odds could land you in hot water when renovating and selling your property on.

Do your research before the auction to confirm what’s realistic and what’s not. You can ask local estate agents for their advice, look at how much similar properties within the area have sold for, and even call on future neighbours to get the facts ahead of auction day.

Take a closer look at the documentation

The legal pack makes for vital reading when buying any auction property. It’ll contain all the bits and bobs you need to analyse a potential purchase in as much detail as it deserves, and should include title deeds, local authority searches, TA6 property information form, and TA10 fittings and contents form. This legal pack should ideally be scrutinised by you and your solicitor.

Get a mortgage in principle BEFORE the auction

If you plan to purchase a property at auction with a mortgage, you should get your ducks in a row before auction day. Be ready to purchase by obtaining a mortgage in principle, or agreement in principle (AIP). This essential document will provide confirmation that you can lend up to a certain amount and will pave the way to a full mortgage application once your winning bid has been accepted.

When buying with a mortgage at auction, you’ll need a cash deposit – of at least 10% – just as you would when purchasing through an estate agent. The remaining sum is due one month after auction day.

You can find the mortgage advice and support you need for your auction buy right here at The Mortgage Bureau. Get in touch today to secure finance for your purchase.