Before you buy any property from auction, you need to do some serious research. Here, we will discuss some useful tips any auction property purchaser should use when considering an auction property.
For a much more detailed discussion and the mechanics of buying from auction, be sure to read Your Property Bible.
Prior to the auction, you need to secure a copy or catalogue of the property lots that will be auctioned in that particular auction house. It may be worthwhile to obtain several catalogues from local auction houses so that you can compare property specifics. A lot of the auction houses charge a small fee if you wish to be sent catalogues periodically. However, you may not need to pay for your catalogue if you ring the auction house and request a catalogue every time you wish to attend.
Once you have the auction catalogues to hand, you should scan them for properties that suit your preference both in terms of guide price and the location of the property. You should always visit an auction property prior to bidding as I’ve seen some properties which look ok from the outside but have been completely trashed on the inside.
On the day of the auction, you need to acquaint yourself with the mechanics of that auction. Usually, there is a need for prior registration if you wish to participate in the bidding. Be sure to take in any identification documents with you. You will not be allowed to bid without proof of ID. You will also need to take in a cheque book or bankers draft for any deposits that may be required.
Never arrive late. This is very important because you will need time to familiarize with the auction room and the mannerisms of the auctioneer. On arrival, always check the list of properties for any changes or alterations. It is not uncommon for properties to be removed from auction proceedings prior to the auction.
If you are interested in bidding for any particular property, you should check any legal paperwork the auction house may hold for that property. If there are any conditions of sale that you are not sure about, it is imperative you speak to the legal team dealing with that property sale – you should be able to speak to them prior to bidding for your lot.
Double check any terms and conditions of the contract governing the schedule of payments. It is extremely important to make sure that you have available funds to purchase any one property in accordance with the terms and conditions of that lot – some lots may require completion within 14 days; I’ve been to auctions, where the conditions of sale have changed in between the catalogue being printed and the date of the auction; in such event the auctioneer will let you know before you’re asked to bid for that property.
If you feel that there maybe a need for a mortgage, it is important that you arrange this before attending the auction. Otherwise, you will risk losing any deposit you put forward for a property that you are subsequently not able to raise finance for. The mortgage will obviously be dependent on a satisfactory survey of the property – you will need to pay for this understanding of course that you will lose this fee if you don’t get the sale.
If there are any properties that you are interested in, it is important to remember that an offer can be made before the auction. The seller will consider the offer and get back to you if he wants to proceed on that basis. In the event of your offer being accepted, the property will be removed from the auction process and you will be obliged to complete on the purchase.
If you are to bid, make your bid clear so as to prevent confusion on the part of the auctioneer. Whenever bidding at auction always have your maximum possible bid in mind and don’t ever deter from this amount. Your maximum bid will take into account any works that you feel need doing to the property and also any profit levels you need to clear.
If a property fails to sell at auction due to the reservation price not being met, you should consider making a bid directly after the bidding has stopped.
Auctions are still a popular form of obtaining (below market value) bmv property, however, you need some basic knowledge of auctions and the way they operate before you should ever consider buying property from auction. Learn more about buying from auction here:
