Buying a house at auction can be an excellent way to bag yourself a bargain or scoop up your next home quickly, but only if you know what you’re doing. After all, while property auctions have the potential to save you both money (and we’re talking thousands) and time, it’s important that you know what you’re doing before you set foot in an auction house.
We’ve put together this handy guide to help get your head around buying a house at auction and better still, making the process as stress-free as possible for you.
What are the benefits of buying a house at auction?
As mentioned, auctions present those looking for a property with an opportunity to save money, while lessening the amount of time the entire buying process can often take.
But what are the other benefits that come with buying a house at auction? What makes buying at auction really attractive is that once you’ve successfully bid on a property it’s all yours, which means there’s no chance that the purchase will fall through. Auctions can also be a great place to find unusual listings, as well as those rundown properties that need completely refurbishing – if that’s what you’re after.
Can anyone bid on a house at auction?
In short, yes. It doesn’t matter whether you’re an auction house pro’ or a first-time bidder, anyone is welcome.
How do you buy a house at auction?
If you feel like you fancy buying a house at auction, then follow these steps:
1. Find yourself an auction house
2. Do your research
Preparation is key when it comes to successfully buying a house at auction. With that in mind, take the time to look through the properties going up for auction and make sure you keep a note of them – the more prepared you are the better.
3. Make sure you have your finances in order
As well as an additional auction house fee (generally around £150), you should make sure you have enough money to cover:
- A 10 per cent deposit (must-have on the auction day)
- You’ll need to have the remaining 90 per cent – the final balance – within 28 days (if you don’t, you could risk losing your deposit)
- Some auction houses also charge a ‘buyers premium’ fee which can be up to 1.5 per cent of the asking price – be sure to find this out from the auctioneer beforehand
A top tip from us is to try and arrange a mortgage in principle before you head to the auction. There’s no point in bidding – and winning – if you can’t afford the property.
4. View any property you’re interested in before the auction
5. Deal with any legal matters
You’ll be given a legal pack by the auction house if you express an interest in a particular property. Give this a thorough read before the auction and ask a legal expert, like a solicitor, to have a look through if there’s anything you’re unsure of.
6. Carry out searches and surveys
Once the auctioneer’s gavel hits the block, the property is yours – this means that you need to be certain about their purchase before bidding. With this in mind, be sure to do any searches and surveys ahead of the auction taking place.
7. Remember the guide price is literally, a ‘guide’
In most cases, guide prices are at least 10 per cent below the actual value of the anticipated sale of the property. And remember, the guide price can change in the lead-up to the auction, and on the actual day.
8. Be calm and remember how much you can afford
When the day comes to bid remember to keep calm and remember your budget. While it might be tempting to bid more, however much you like a property, you should stick with the amount you can afford.
9. Don’t give up
If the property you were after doesn’t hit its reserve price, then don’t give up. The seller might still want to sell to the highest bidder, so if that’s you, be sure to stick around just in case.
Are you looking to buy or sell a house at auction?
If you’re thinking about buying or selling a house at auction then get in touch with the auction experts at Shortland Horne. We can provide you with the essential advice, guidance and information you need to ensure that buying or selling a house at auction is the best route for you.