Buying a Home at Auction: What to Expect
Purchasing a property at auction can be an exciting yet daunting experience. As auction sales have become more popular in recent years – with nearly £3 billion worth of residential property sold at auction in 2023 – more buyers are considering this method to purchase a home.
If you’re thinking about buying a house at auction, it’s important to understand the process and know what to expect. This guide will walk you through the key steps so you can buy with confidence.
Research the Property
The first step is researching the properties that will be up for auction. Review auction catalogues for details on each home like the address, number of bedrooms/bathrooms, square footage, and any provided photos. You may even want to drive by the property to view the exterior and neighbourhood. If possible, attend any scheduled open houses to tour the inside, it’s always good to have a look at the property before you go to auction. Thorough research will help you determine if the property has potential and meets your needs.
Arrange Financing
Buying via conditional auction offers a longer exchange and completion date than the more traditional unconditional auction route. This gives buyers the flexibility to consider applying for a mortgage, if they wish to do so.
Having financing ready allows you to move quickly if you win the bidding – so apply for your mortgage beforehand.
Set a Maximum Bid
Decide the maximum you’re willing and able to pay for the property and don’t exceed this limit in the bidding war. Make sure to factor in potential renovation costs and repairs needed. The bidding can move quickly during the excitement of auction day. Stick to your budget to avoid overpaying!
Attend the (Online) Auction
Auctions nowadays are often held online – allowing you to bid from anywhere at any time. Register on the website to get set up for bidding. Make sure to read through the terms and auction FAQs. Once the auction begins, you can track listings and watch the bidding in real-time as well as place bids through your account. You’ll see each new bid come in and can place your own counter-bid.
You can bid in online auctions 24/7, from any device and anywhere in the Country, meaning you won’t miss out on the property you’re after. Auctions are considered a more transparent way to purchase a property, whether bidding online or at a live in-room auction, you can see the other bids and place your bid at a price you’re comfortable with, without dealing with the uncertainty and stress of a closed bidding war!
Make the Deposit
If you win, be ready to immediately make the reservation fee and/or a deposit. Have your cheque/bank draft ready. The remaining purchase balance is typically due within 28 days. You’ll work with the auction company to finalise the purchase contract and transfer of deed.
Make Repairs and Renovate
Many properties sold at auction are fixer-uppers requiring varying degrees of repairs and renovations. Before bidding, thoroughly inspect the property and identify any issues or defects – you may even want to organise a surveyor to attend. Consider the home’s age and components that may need replacement due to wear-and-tear like the roof, heating system, plumbing, and electrics. Cosmetic upgrades like painting, flooring, and installing new fixtures can make the space feel fresh.
Plan your remodel carefully as repairs and renovations can become expensive projects. Get quotes from contractors to determine likely costs for any major upgrades needed like kitchen/bathroom instals, extensions, or conversions. Factor in a 10-20% buffer for unexpected overruns.
Get Guidance from the Experts
Our auction experts are available to offer you all the help and guidance you need, to ensure you’re comfortable with buying at auction. Please get in touch if you have any questions and they’ll happily guide you through the process to ensure buying at auction is the best route for you.
You can browse our upcoming auctions and available properties through our website. Contact us today if you need help getting started bidding at auction. Our team is here to help your dream of home ownership become reality!
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