Owning a home is a dream for many in the UK, but many people are finding it hard to get on the ladder.
But, if you’re finding it hard to buy a home the regular way, maybe consider a property auction.
What’s a house auction?
The name pretty much says it all. Just like any auction where items are bought in a bidding process, this is the same, however, you buy houses. You can also grab other types of property for a steal too.
Houses listed here may have been added by those looking to sell one or could be properties that have been abandoned or repossessed. Either way, they’re a great place for investors or those looking for a property at a steal.
How does it work?
Taking place at auction houses, these are often planned months in advance. The house will release a catalogue of properties, known as lots, ahead of the event so potential bidders can see what’s available. This can be anywhere between two weeks and a month before the auction.
Inside the catalogue, a guide price will often be next to each property. This is what the seller or auction house thinks the property’s value is but is different from the reserve. This is the minimum price the seller is willing to let it go for but is often confidential.
Now that you know what a property auction is, below are the six golden rules to follow if you plan on obtaining property from one.
The most important thing to do is set a limit. It’s very easy to get caught up in the moment at an auction, but you don’t want to pay more for a place than you would want to normally.
Maybe take someone with you who can keep you under control.
You should always view a property you’re interested in. You wouldn’t buy any other house without seeing it, would you?
However, always make time to view it more than once, as you may notice things you missed the first time around.
If you successfully win a home, you’ll need to set a number of days in which to exchange and complete. Therefore, if you’re not a cash buyer, it’s important to have your mortgage in principle organised ahead of the bidding process.
Each property being sold will come with a legal pack made by the sellers’ solicitors. You should ensure you study this thoroughly before making a bid, and always check the small print. It could help to send a copy to your solicitor.
If you’re buying a ‘doer-upper’ you’ll need a survey. The last thing you want is to find extreme damage to the property that’ll cost a lot to fix. This will affect the cost of the house overall.
Finally, insurance, from landlord’s insurance from the likes of HomeLet to regular home insurance, get this sorted before you start doing anything to the house once purchased.
Now that you know how to tackle a property auction, it’s time to go out there and start getting those properties you’ve always wanted.