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Auctions

It has always been thought that purchasing a property at auction should only be done by seasoned investors, however, with careful planning and consideration there is no reason why any buyer could consider buying at auction.

I always recommend in the first instance that you visit a few auctions on a fact finding basis to understand more what is involved when you then go to formally bid for a property. This will give you greater confidence and help you concentrate your efforts on the job in mind.

Once you have outlined which auction you are going to attend you should look at their guide and outline which property you are interested in purchasing. The next thing to do is to consider arranging a valuation by professional surveyor to give you a guide as to current value for lending purposes and also if the property is mortgageable. If the property is not mortgageable then you know you will have to purchase the property with cash to proceed.

The advantage of valuation is it will help you determine the maximum you can pay for the property and what mortgage you can obtain based upon these comments.

Although it is not a requirement to have a valuation before the auction, I believe this is essential for a number of reasons.

Firstly you need to know what your limits are with any mortgage you need.

Secondly you usually only have 21 days to complete the purchase and having carried out a valuation before the auction will save time later on in the buying process. (Please note each auction house has its own completion deadlines and you must ensure you consider this before you purchase a property)

Thirdly if you have the winning bid you will be required to exchange contracts usually with 10% deposit at the auction. If any problems come up in a valuation post the auction you could loose your deposit if you are unable to complete on the purchase.

There is a cost in having a valuation, but it can prove to be invaluable in the process of buying at an auction.

The other important area to consider at auctions is the legal pack. Often complications arise not due to the finding of a valuation but due to a legal issue. It is vital you ensure a complete legal pack is received by your solicitor before you bid at the auction to once again ensure you will not have any issues in completing your purchase.

Although there are some very important considerations here auctions can often provide an excellent way of purchasing a property below market value, after all it all depends who is bidding on the day. Be careful though not to get carried away in the buzz of an auction house and end up paying more than the property is worth.

FCA does not regulate surveyors and solicitors.

Your home may be repossessed if you do not keep up repayments on your mortgage.

For mortgage advice we can be paid by commission from the lender or we can charge a fee of typically 0.5% of the loan amount.

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