Buying a house at auction has its benefits, including the opportunity to find a bargain and a fast purchase process. However, if you have never been to a property auction before, you may be unsure of how the process works. Going to an auction house for the first time can be daunting, so to help you through this, here is a brief guide to buying a house at auction.
Budget and Finances
Just like buying a property through an estate agent, it is crucial that you have your budget and finances in order before bidding. This is important for two reasons: one, it can be easy to get carried away in a bidding war, so knowing your budget will help you to stay on track; and two, if successful in your bid, you must pay 10% of the purchase price on auction day followed by the remaining amount in less than 30 days, so it is essential to find a mortgage (if needed) prior to auction.
View and Research
It is never advisable to bid on a property without first viewing and carrying out research. For any properties you may be interested in, have at least one viewing (although two is better) and if work needs to be done, obtain quotes before auction day. It is also a good idea to obtain a survey and hire a solicitor to go through the legal pack, to rule out any underlying problems and assess the property’s value. When this has been completed, ask for a copy of the auction catalogue, to find out the order of the lots.
This is an exciting but nerve-inducing day, so preparing beforehand will help to calm your nerves. Before setting off, make sure you have your personal information and a form of ID, financial details and solicitor information. On arrival, you will need to register before getting your bidding number. Property auctions can be busy, so aim to be there early to ensure you can find a seat. When finding a spot, make sure you are visible to the auctioneer, so that your bids can be seen.
Securing the Sale
If your bid is successful (congratulations!), you will need to go through a process to secure the sale. In addition to paying the 10% deposit, you will need to sign a document called the memorandum of sale, pay admin fees and obtain your copy of the contract.
Buying a property at auction can be exciting, but it also requires a lot of preparation. Hopefully, this guide will help you on your property bidding journey. Good luck!
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