Many of us have been lured in by the possibility of landing a bargain, or through curiosity about the whole auction process, stoked by the rise of property programmes on TV. Auctions are the last word in equal opportunities – anyone who has the funds can put in a bid and, while you do run the risk of losing out on any money spent ahead of the auction on surveys or legal fees if you are outbid, the whole process can move quite a bit faster than buying a house or flat through an estate agent or similar routes.
Bidding for your next residential property at an auction can require tenacity, patience and nerves of steel. Here, property legal experts, Ashworths Solicitors LLP offer some top tips to get you through the process.
Keep your head
The most important tips of all is to stay calm and don’t let the thrill of the chase overtake common sense. Only bid up to what you can afford and avoid getting into competition with another bidder just for the sake of it. Remember that the purchase price is only one part of your overall expenses; legal advice and conveyancing services should also be factored into your budget, along with some wriggle room for unexpected costs further down the line, legal or otherwise.
Know the score
Understand what you are bidding for and potentially buying by finding out as much as you can about the property in advance of the auction so there are no nasty surprises. It is not uncommon for properties sold at auction to be subject to a number of flaws of varying seriousness. Check these out well in advance and make sure you have the means to deal with them, should you become the property’s new owner.
Go prepared
Get your funds in place before you get there, as there is usually a deposit due on the day of around 10% and the legal wheels will start to turn quite quickly once your bid has been formally accepted and verified. Secure a letter from your bank or building society, stating the figure they will be prepared to lend, and check for any restrictions in their lending agreements that might void their offer. If you are planning any major changes to the property, run them past your local planning department first and talk to a builder for an idea of renovation costs and a legal expert about matters such as land registry changes, deeds and advice on applying for planning permission.
Time is money
Try to attend a few auctions in advance of the one you are interested in, to get a feel for the process before the big day. Arrive at your auction early to register and for a chance to gather your thoughts before bidding starts. Take another look at the paperwork attached to the property: are there any concerns you had not noticed before? Take time to do this now to avoid costly mistakes later on. Take two forms of ID with you to prevent delays processing your bid, should you win.
Second chances
If you are outbid, don’t despair. Quite often, people bid for houses or flats, then encounter problems with finances, planning permission or personal concerns. Or they might simply change their minds. The fall of the hammer is legally binding, so a doubtful new owner might welcome your post-event offer with open arms. If it’s not to be, however, get yourself on the lists to be notified when similar properties come onto the market. The right one for you might be just around the corner!
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