Background to UK Property Auctions
This is where great deals can be made. You can save up to 40% on a property by buying it at auction. Mortgage Lenders often put up their repossessed properties for sale, usually at deliberately reduced "reserve" prices to ensure they sell quickly. Local authorities and housing associations use them for similar reasons.
These guys have a lot of flats/houses on their books and don't seem to see the value of them as much as you might. They basically just want to get rid of them and recoup some money as fast as possible.
Other properties put up for auction will be those with development potential or difficult to sell.
Of course there are some downsides to buying property at auctions - though these can be dealt with fairly easily.
One is that you'll need to have got your valuation or survey and mortgage sorted out beforehand. Even though you've paid up to a few hundred pounds for these, there's no guarantee you'll be the successful bidder. However, if you've got the spare cash the sort of savings possible could make it very worthwhile.
You also have to move fast and there is much greater uncertainty than buying a home the normal way - until the auctioneer's hammer falls on the highest bid.
The timescale from the announcement - basically when the auction catalogue showing all the "lots" for sale is printed - to the date of the auction is often only three or four weeks. However it's quite possible to arrange everything within that time if you organise yourself properly.
Basically the process is the same as completing a normal property deal just much quicker !!
For the mortgage you would proceed as if your offer has been accepted and you now have to arrange the actual purchase.
Many normal individuals from all types of different backgrounds, with no experience of auctions, have done it succesfully and are very glad they did. A further benefit of buying at auction is that you can buy your home more quickly because it isn't part of a slow moving and stressful chain.
How to buy at auction
If you're nervous about the auction process (which isn't nearly as scary as it's made to look on films) you could get your solicitor or surveyor to do the bidding for you. You can either stand beside them or, if you prefer, could stay at home clutching teddy and waiting for the phone to ring with the news.
You should always set a price limit on the property. If you're doing the bidding yourself don't get carried away and exceed it. Just because someone else is bidding higher doesn't mean the property has suddenly gone up in value.
You would know what to pay for your chosen property because you'd have conducted a survey, had some of the conveyancing completed and arranged a mortgage beforehand. The mortgage lender will need to be satisfied with the valuation. You must ensure the surveyor you use is on the panel of your intended mortgage lender otherwise they will require an additional valuation and this will cause delay and expense.
You should also consider having a full survey done to protect yourself. Perhaps the property is for sale because it's got serious structural problems... which a simple valuation may not pick up... It may cost more but it will save you from a potential huge loss.
If your bid is successful you are legally bound to buy the property and you will need to pay a deposit on the day of 10% of the agreed price.
You would sign the contract (which you've seen beforehand) in the sale room.
The seller is legally bound to complete on the day. You would pay them the rest of the price (ie 90%) within the next 28 days.
If necessary you could use a bridging loan to pay this off. These are short-term loans which are often used for auction purchases.
A good idea is to attend a few auctions as an observer and get a feel for them.
I hope you found the information useful and good luck with your property hunting. If you would like any further information or would like us to provide you with a quotation for your mortgage please either call on 07517 462344 or email on simon.kramer@sq1finance.co.uk and we'll be pleased to help.
This is where great deals can be made. You can save up to 40% on a property by buying it at auction. Mortgage Lenders often put up their repossessed properties for sale, usually at deliberately reduced "reserve" prices to ensure they sell quickly. Local authorities and housing associations use them for similar reasons.
These guys have a lot of flats/houses on their books and don't seem to see the value of them as much as you might. They basically just want to get rid of them and recoup some money as fast as possible.
Other properties put up for auction will be those with development potential or difficult to sell.
Of course there are some downsides to buying property at auctions - though these can be dealt with fairly easily.
One is that you'll need to have got your valuation or survey and mortgage sorted out beforehand. Even though you've paid up to a few hundred pounds for these, there's no guarantee you'll be the successful bidder. However, if you've got the spare cash the sort of savings possible could make it very worthwhile.
You also have to move fast and there is much greater uncertainty than buying a home the normal way - until the auctioneer's hammer falls on the highest bid.
The timescale from the announcement - basically when the auction catalogue showing all the "lots" for sale is printed - to the date of the auction is often only three or four weeks. However it's quite possible to arrange everything within that time if you organise yourself properly.
Basically the process is the same as completing a normal property deal just much quicker !!
For the mortgage you would proceed as if your offer has been accepted and you now have to arrange the actual purchase.
Many normal individuals from all types of different backgrounds, with no experience of auctions, have done it succesfully and are very glad they did. A further benefit of buying at auction is that you can buy your home more quickly because it isn't part of a slow moving and stressful chain.
How to buy at auction
If you're nervous about the auction process (which isn't nearly as scary as it's made to look on films) you could get your solicitor or surveyor to do the bidding for you. You can either stand beside them or, if you prefer, could stay at home clutching teddy and waiting for the phone to ring with the news.
You should always set a price limit on the property. If you're doing the bidding yourself don't get carried away and exceed it. Just because someone else is bidding higher doesn't mean the property has suddenly gone up in value.
You would know what to pay for your chosen property because you'd have conducted a survey, had some of the conveyancing completed and arranged a mortgage beforehand. The mortgage lender will need to be satisfied with the valuation. You must ensure the surveyor you use is on the panel of your intended mortgage lender otherwise they will require an additional valuation and this will cause delay and expense.
You should also consider having a full survey done to protect yourself. Perhaps the property is for sale because it's got serious structural problems... which a simple valuation may not pick up... It may cost more but it will save you from a potential huge loss.
If your bid is successful you are legally bound to buy the property and you will need to pay a deposit on the day of 10% of the agreed price.
You would sign the contract (which you've seen beforehand) in the sale room.
The seller is legally bound to complete on the day. You would pay them the rest of the price (ie 90%) within the next 28 days.
If necessary you could use a bridging loan to pay this off. These are short-term loans which are often used for auction purchases.
A good idea is to attend a few auctions as an observer and get a feel for them.
I hope you found the information useful and good luck with your property hunting. If you would like any further information or would like us to provide you with a quotation for your mortgage please either call on 07517 462344 or email on simon.kramer@sq1finance.co.uk and we'll be pleased to help.
Kerrie Kramer trading as SQ1 Finance is an Appointed Representative of the The Mortgage Times Group Limited, 279 Tottenham Court Road, London W1T 7RJ, which is authorised and regulated by the Financial Services Authority no. 303007.
Want to buy a property at auction ... ?
"You can save up to 40% compared to buying a property via the usual routes but you do need to be aware of the key differences in the buying process and be well organised ..."
"You can save up to 40% compared to buying a property via the usual routes but you do need to be aware of the key differences in the buying process and be well organised ..."
Simon Kramer
Property Auction Site Links: