Homes Under The Hammer
What kind of properties can I get at auction? Traditionally, most have tended to be run-down and in need of attention. With repossessions rising, however, you could get your hands on something more decent or a new-build bargain.
How should I prepare? Attend a couple of auctions without bidding to familiarise yourself with the process. When you find a property you want to buy, request a legal pack from the auction house as early as possible. If you are applying for a mortgage, the lender will require a valuation and often a survey, too. And never bid for a property without having viewed it – if the price seems too good to be true, that may well be because it is.
Who will I be up against? Everyone from first-time buyers to serious investors. The professionals will probably know how much a property costs to renovate, so keep an eye on them: if they stop bidding, it might be worth following suit.
What is the difference between the guide price and the reserve? The reserve price, set by the vendor with help from the auctioneer, is the minimum that will be accepted. If bidding stops before it is reached, the lot will not be sold – although you may be able to negotiate with the owner afterwards. The reserve is not revealed; the guide price, quoted in the auction catalogue, is intended to give an idea of a suitable figure.
What if I really, really want a particular property? You can try making an offer prior to the sale – although this might not work if the vendor is a bank, building society or public body with a legal obligation to obtain the best price. A private seller may be persuaded to accept an offer if you convince them that they’re not going to do any better in the auction room.
Do I have to travel to the area where I want to buy a property for an auction? Not necessarily. A London auction can feature homes all over the country.
What should I watch out for? Read the catalogue carefully. A property may have a tenant in situ – find out what their tenancy agreement says, as you may be stuck with someone on a fixed low rent who cannot be evicted. Watch out for planning issues, too – make sure a house “arranged” as flats, say, had permission for the conversion.
How long do I have to pay? You will have to pay a 10% deposit on the day, so take along your cheque book and ID. Completion times vary, but reckon on about four weeks. And make sure you have the funding in place – if you don’t complete on time, you will lose your deposit.
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