House auctions are exciting affairs. The normal long-drawn out process of house buying is telescoped into a few minutes of frantic bidding. While the unwary may be in danger of paying over the odds, the pressing need to sell ensures that auctions offer an excellent opportunity to buy cheap property.
Repossessed homes are always on the menu, and not everyone likes the thought of benefiting from someone else’s misery. But the dispossessed would be still worse off without home auctions. In order to get some money back they need people to buy their former home.
Finding Cheap Property at House Auctions
Those interested in buying properties in this way must first find their auction. Home auctions are advertised in specialist property publications, on the property pages of newspapers and magazines, and online. And all property auctioneers will, of course, happily give information on their upcoming sales. Having established where and when an auction is to take place, the next step for those in search of cheap property is to acquire a catalogue. This will give details of all the properties available.
Viewing Auction Properties in Advance
The prospective buyer must now move fast, for there is seldom more than three weeks between the appearance of the catalogue and the auction itself. And while some are prepared to take the risk, it really is pretty stupid to buy a home without checking it out carefully in advance.
The sort of property sold at house auctions is always different in some respect from that marketed in the normal way. Houses for auction include, for example, property which is considered too run down for a normal sale. This is why many property developers are to be found at auctions.
For the ordinary home buyer, the most promising auction properties are repossessed homes. Generally speaking, these are sold at home auctions simply because the lender, having no interest in owning a house, wants the quickest possible sale in order to recoup the unpaid loan. There is no point in being squeamish about buying properties which have been repossessed: only when the house is sold does the former owner get any money back.
Researching Auction Properties
Having found something which appeals, the prospective buyer should look carefully at other properties in the area in order to see how attractive the guide price is – always bearing in mind that that figure is designed to attract interest, and is often lower than the price finally achieved.
Unless the building is new and built to stringent standards, it should be looked at by an expert. It goes against the grain to pay for a survey of a house which may in the end go to someone else, but it would be much worse to buy one which turned out to be unsound.
Houses for auction come with legal packs which are available from the auctioneers. A prospective bidder should show the legal pack to a solicitor in order to be aware of potential difficulties – there often are with auction properties.
Buying Properties at Home Auctions
It is possible to preempt the whole process by submitting a bid before the auction. If the seller accepts, the property is then withdrawn from the list.
But for properties sold on the day of the auction, the buyer must have financial arrangements – for example, a mortgage or a bridging loan – already in place. A ten percent deposit, payable on auction day, will be forfeit if the balance is not paid within twenty-eight days.
On the day itself, auction rooms usually being very crowded, those who arrive late may well have to stand. And those who mean to bid should make quite sure that they are easily visible to the auctioneer. For those who cannot be present, it may be possible to bid by telephone. The auction house will advise.
Having decided on a maximum price, the bidder should not exceed it. If the property goes to someone else, then time and money have been wasted, but this simply has to be accepted. Otherwise, when the hammer falls, the deal is done. There will be no anxious weeks of waiting, no possibility of being gazumped. Everything has been accomplished in three weeks.