How Does Buying a House at an Auction Work?
One of the most popular methods for buying a house is at auction. Whether you’re a novice or a seasoned professional, let us show you how to make the process easier so you can try it yourself.
Before the auction
For every property auction, there is a catalogue of properties with all available individual properties known as ‘Lots’. From this you’ll be able to browse all the homes offered for auction on the day. Study the catalogue and website for houses, land and properties available. There are virtual viewings/walkthrough videos to give you an idea of the layout and condition, then contact the auctioneers to arrange an appointment for a physical viewing of the lots of interest.
Arrange a viewing of the property
When buying a house at auction, you can find some great properties, as well as opportunities to renovate. But regardless of price, you shouldn’t rush into things, and you should certainly view the property beforehand.
Don’t be afraid to ask questions of the property auctioneer as they will be able to help explain the process.
Consider what you’re willing to pay
The properties have guide prices which are an indication of the reserve price. However, on occasions, these can be exceeded, especially if there are multiple bidders. Work out what the property is worth to you, taking into consideration others that may be for sale in the area together with the cost of any improvement works.
Surveys and legalities
Think about having the property surveyed. A homeowners report will cost around £600 and it’s worth considering so you know what you’re buying. Note that this is a non-refundable cost which you will lose if you decide not to buy or if your bid is unsuccessful.
It’s also important to look over the legal pack. Auctioneers will provide this before the property goes to Auction. The pack normally consists of Special Conditions of Sale, title deeds, searches, and relevant information to help you. It is recommended that if you do not fully understand the paperwork you ask a solicitor to check through the legal documentation for you.
If you need a mortgage
Get a ‘mortgage in principle’ before you commit so that you’re ready to go. Once the hammer falls you have to pay 10%. It is important to make sure that you have the funds in place for the sale to go through successfully otherwise you risk losing the deposit, and possibly more, if the sale doesn’t complete.
On auction day
Keep calm on the day and make sure you know your budget before you get caught up in the buzz. There is a chance you’ll find an underrated home at a bargain price, but there are risks to consider - so keep calm and know your strategy.
It’s important to prepare early and make sure you have everything you need before the auction starts (online or otherwise!). This will normally include registration with two forms of ID along with having the method of payment for the 10% deposit. It is important to check the Auctioneers website to see the exact documentation you will need. Before the Auction (in most cases, the night before the auction) the Auctioneer will issue an Addendum which will show any alterations to the Lots since the catalogue was made available.
Do you want to try it yourself?
Consider our upcoming auctions here to find your dream home or your next investment opportunity.
If you’d like more expert guidance on buying a house at auction then please contact us on: 0345 8500333
