When it comes to buying property most people still take the traditional route of using a high street estate agent. But there are alternatives, one of which is to buy at auction.
Properties are sold at auction for a number of reasons, often because they have been repossessed by a lender – https://www.gov.uk/government/statistical-data-sets/live-tables-on-repossession-activity. Auctions are popular with landlords looking to buy properties online and if you are just starting out in buy-to-let remember you will need other things like property inventory software too. Buying at auction is a rather different process and can be confusing for beginners, so what do you need to know?
1 Find an auction house
Some auctioneers specialise in selling property, so you need to find the ones that do in the area you are interested in and get yourself on their mailing lists.
2 Know the market
It can be easy to get carried away when bidding at auction, so it’s important to research the market. If you know what properties are selling for in the area then you will be able to set your maximum bid accordingly. Using property investment software can help you to decide if a deal is worthwhile or not.
3 Bid to buy
Remember that when buying at auction the rules are slightly different. If you are the highest bidder when the hammer falls then you will have to buy the property. You cannot pull out of the deal even if you change your mind later.
4 Bidding online
The above applies if you are bidding online too. Buying other goods online, whether through a store or a marketplace like eBay, means you are covered by distance selling regulations and consumer law. However, with a property auction because the house is available for inspection in advance you are not covered by these rules even if you choose to bid online.
5 Read the T&Cs
By placing a bid at an auction you are agreeing to the auctioneer’s terms and conditions, so it’s important to read and understand them beforehand. At the close of the auction, you will generally be expected to pay a deposit straightaway along with any admin charges. The balance of the purchase price will be due, usually inside 28 days, so you need to ensure you have funds available.