Avoid The Pitfalls When Buying Property At Auction
Unless you are a seasoned auction attendee, you’re bound to feel nervous when visiting a property auction. They can be very busy and austere places indeed. And the amounts of money concerned also contribute to make the whole ordeal pretty scary. We all worry that we may end up accidentally bidding and ending up buying a multi-million pound property that we can’t afford. Needless to say that doesn’t really happen!
Everyone knows you can pick up some great bargains at property auctions, but you can easily end up losing money unless you are careful.Â Here are some tips for making the best of your property auction experience.
1. Do Plenty of Research
Of the many auction companies around the UK, some deal only with local property whilst others offer properties nationwide. Some only offer commercial properties, some residential, some both. And certain auction houses are strong in particular locations and for particular types of property.Â Find out beforehand which deal in the types of properties you want to buy.
2.Â Find out how it all works
Before you start bidding, make sure you know how everything works. Check out the catalogue carefully and in plenty of time and do full due diligence on the properties you fancy including going through legal packs, viewing the property and setting a maximum price you will pay. Speak to the auctioneer if you have any questions and make sure you are confident about the auction process.
3. Understand the Legals
Before you bid, always ask a legally qualified person to review the legal pack. There can be all manner of legally binding conditions and restrictions attached to a property such as covenants and you must be aware of all of these.
4. Setting your limit
There is lots of info online to allow you to see what similar properties have sold for in the same area. Or ask a local estate agent for guidance. Once you know what you need to bid as a maximum, get it in your head and stick to it. Whatever happens, never bid above the limit you have set.
5. Don’t Buy Unseen.
If you can’t see the property before the auction, be suspicious. There may be valid reasons why a viewing may not be possible, for example if the property is tenanted, but there are obviously things that may also be hidden in this way.Â If you really want a certain property, ignore what the seller says, pluck up the courage and go and knock on the door and ask questions.
6. Before And After An Auction
Remember that there are opportunities to pick up a bargain either before or after the auction and you are at liberty to make an offer at any point. When properties have failed to reach their reserve price, seller expectations may have been modified so it can be a good time to make an offer. They’ll also be saving the cost and hassle of going through the action process another time.
So make sure you do your homework. If you are careful and don’t get carried away, there are some real bargains out there. But remember the old adage. If something looks too good to be true, it probably isn’t what it seems.