The main attraction of buying at UK property auction is that you can buy the property at far below the prevailing market rates. Potential UK auctions properties are usually offered to real estate agents first, so spend some time cultivating a relationship with your local estate agents to know when and where a property auction is held. We are living in the age of computers and therefore there can not be an easier, quicker and more comprehensive way of obtaining UK property auction information than searching the Internet. Now take a look at these following tips so that you can widen your opportunity:
At first, visit the property beforehand and try to get as much detail as possible. Contact the auction house and see if they have a legal package for the property that you can view. If you are viewing the property and are really serious about buying it, unless you have some surveying experience, it would be an idea to make sure a survey is done. Obviously, this has a cost implication and this should not be taken lightly, as there is no guarantee whatsoever that you will end up winning the bid for the property. In time, unless there are any major structural defects, you will probably begin to trust your own opinion on the state of the property, because you will become skilled in knowing how to spot obvious defects like damp or leaning walls etc.
Secondly, be aware of the auctioneer taking what is called bids off the wall, or false bids. This is when he takes imaginary bids in order to start the bidding or to keep the ball rolling on bidding or if there is someone in the audience he is working with, who bids but has no intention of buying the property. Believe it or not, this is totally legal as long as these imaginary bids don’t exceed the reserve price for the property.
Thirdly, remember that you can place a bid and purchase the property before the auction, just contact the auction house if you wish to do so. There are many properties that you will not be able to buy at auction this way, such as repossessions, mainly because legally the lenders have to be seen to be selling the property in an open and fair way. This means they usually have to go to auction. But there are also many properties that never get to auction; they are withdrawn because the vendor has accepted an offer from someone who has just seen the property in the auction catalogue and put in an acceptable offer before it gets as far as the auction itself.
Fourthly, don’t forget that if the property goes unsold at the auction for whatever reason, for instance the reserve price is not met; you can still try and negotiate a sale. Simply find a member of the auction team afterwards and negotiate through them with the vendor. Or better still – if the vendor is there negotiate with him directly.
Finally, have a limit in your mind as to what you are willing to spend and don’t go above it. If you are successful at auction, remember you will need to pay a deposit, normally around 10%, with the rest payable on completion – normally around 28 days from the auction.