Although it requires extra effort, buying a repossessed home at auction can be a more affordable way of getting on the property ladder because property auctions can offer value for money to first-buyers. Here are 7 pieces of advice to help you get started.
Do your research
Before taking your first step into the world of property auctions, arm yourself with as much knowledge as possible. The auction houses in the area you are looking to buy will probably have mailing lists, and signing up to them is a good idea. There are auctioneers’ websites online which have legal packs of properties available; browse the internet for these sites and download the packs that catch your eye.
If you know anyone that has purchased property at an auction before, it’s worth asking them about their experience because they could have helpful advice to pass on to you.
It’s also a good idea to go and see the auction process at least once before you go there intending to buy a property. A auction house can be a fairly competitive environment, and going for a visit in advance will make you more familiar with how the auction works and help you feel less out of your depth.
Find a mortgage
Most people need a mortgage in order to finance a property purchase, and if you fall into this category, it would be sensible for you to begin arranging this as soon as possible and ideally before you find your potential house. We recommend that you get a mortgage ‘agreement in principle’ as this will help you in three ways:
1. You can set your budget and know which properties you can afford
2. You will be able to bid with confidence because you know that you have the funds to back you up
3. Once you do make the winning bid, you’ll be able to get things moving quickly
A requirement of the auction process is that your lender is able to complete within 20 days, so it is important that you get a mortgage deal where the lender can do so.
View the property and appoint a surveyor
Make sure you visit any property that you are considering purchasing, and, if possible, do so at different times of day so you can make sure that it is truly right for you. It is crucial that you hire a charted surveyor to look at your desired property for you because they will be able to alert you to any structural issues with the house and also provide you with an independent opinion on the true value of the property; with this information, you can confidently choose what your maximum bid will be.
Be prepared for some DIY
When purchasing any house, there are likely to be some things you want to change, but buying a repossessed property greatly increases the likelihood that you’ll need to do some work in order to get the house into top condition. The good thing is that any renovations you make are likely to add value to your home, and you can determine a budget for your restoration work by asking your chartered surveyor whether the property is likely to have a maximum price (e.g. due to location).
Appoint a conveyancing solicitor
Make sure that you use a reliable property lawyer as your conveyancing solicitor will examine the legal pack in order to ensure that the property is not unmarketable and that there aren’t any problems which could cause issues when you later wish to sell the property. There are law firms which specialise in speedy transactions, so tell your conveyancer that you will be buying at auction and have them tailor their service to suit your needs.
At movelawyer.co.uk, we provide you with instant conveyancing quotes, and we only partner with conveyancing solicitors who have been regulated by the Solicitors Regulation Authority (SRA) or the Council of Licensed Conveyancers. When you receive your quote from movelawyer.co.uk, you can rest assured that the conveyancers and conveyancing solicitors that we recommend are professional and experienced.
Stick to your budget
The auction atmosphere can often be competitive and pressured and may tempt you to spend more than you planned, but one of the most important rules of auction bidding is that you never bid beyond your means. Sticking to your budget and not allowing your emotions to rule you in the moment will ensure that you can afford to put down the 10% deposit you will need at the end of the auction.
It is possible that not every property at the auction ended up there due to repossession as some homeowners choose to sell at auction in order to have a quick transaction. Although it is possible to save money by buying at auction, not every auctioned property will automatically be a bargain.