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Property Auction and Property Investment Auction Tips
Most repossessed properties sell through auctions. The best bargains certainly do. If they've got to sell fast, they go to auction and sell cheap! What you now need to know is how to buy these repossessed properties at the best prices at auction.
It's incredibly easy to buy a repossessed property at auction. All you have to do is follow our step-by-step advice. Then you too could be buying at a low, low price - for high, high profits!
BUYING AT AUCTION - YOUR STEP-BY-STEP GUIDE
If you buy a property in the normal way via an estate agent, the procedure is a fairly straightforward and familiar one. You see a property you like, drive by it, have a look at the property particulars and then go and view it if it still appeals to you. Next, you make an offer. Fingers crossed, it is accepted.
You finalise your finances, which you'll have probably lined up before making the offer. You have a survey done on the property. You bring in a solicitor to do the paperwork. Assuming that you can sell your property, everyone else in the chain sells theirs, and no-one starts playing silly games with prices, you'll buy and move in perhaps two or three months down the line. End of story!
If you want to buy a cut-price repossessed property at auction, the overall procedure is broadly similar, with one or two exceptions.
You study photos, descriptions and then go and view the property that catches your eye (or properties of course!). So far, so good - and much the same as a conventional purchase!
Next, you will want to sort out your finances (if you have not done so already). There's no great mystery involved in financing an auction-bought property - basically, you have the same financing options (from using your own money through to getting a mortgage) as you'd have with a conventional purchase. You will need to act fairly promptly here though as the auction may be only three or four weeks away and you must -absolutely must - have finance in place when bidding at the auction. Never bid without having rock-solid finance in place!
If you're going to pursue this repossessed property, you should have a survey done before you bid. If you're financing via a mortgage, the mortgage company will arrange for a valuation survey to be carried out which you'll probably pay for (although some lenders will include it as a freebie to pull in more new business). Don't rely on this - it doesn't guarantee that the property is structurally sound and worth buying; only that it's worth more than the prospective borrowings.
Have your own survey done - by sourcing surveyors either by word-of-mouth recommendations or by going through Yellow Pages. Talk to several, see what they charge, what they do, and decide which one feels right for you. One or two may agree to let you go around with them when they survey the property - this is helpful as they may make a few off-the-record, informal comments which they'd not put in writing.
You can go for a homebuyer's report which is fairly detailed and should highlight potential problems. A full structural survey - about two to three times the price of a homebuyer's report - is more detailed and is better for older properties and those that need renovating.
You have to bring in a solicitor too - they will do all the legal paperwork and make sure everything is in order just as they would for a conventional purchase.
Again, choose one by personal recommendation or trawl through Yellow Pages and approach several until you find one that suits you. The auctioneer will have what's known as a legal pack which contains much of the legal paperwork that's needed - ask for a copy at the earliest possible stage and give this to your solicitor.
So far, so good - much of the process is the same. The key difference is that, with a conventional purchase, you will view the property, make the offer and then finalise your finance, sort out the survey, the legal paperwork and finally complete the deal. With a repossessed property at auction, it's the other way round - you'll have the finance, survey and (most of) the paperwork done before so that you can bid at the auction.
You then go to the auction and bid for the property. The beauty of buying at auction - other than the price - is that once that hammer has fallen, the property is yours with completion typically 21 to 28 days later. The price is fixed - there'll be no last-minute request for an extra £1,000 'or else'! The property is definitely yours - there's no last-minute gazumping. The deal will complete at a set time - there are no delays as chains collapse and people try to get greedy and ask for more!
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