Five things you should do before you bid for property at an auction

So you’re thinking about buying property at auction? Well pat yourself on the back and wisely read the following advice on what you should do before you make the plunge and bid on property at auction.

Watch other auctions

Try not to let the auction that you eventually use be the first one you have ever attended, even online. Make sure you are fully conversant with the procedures, so that when it comes to using the service, there won’t be any big question marks hanging over you.

Read the legal pack and get a solicitor

The legal pack is there for a very good reason; it will safeguard potential sellers and buyers and should contain all the relevant information you should need. Make sure you already have a solicitor who is briefed and ready to act. After the initial 10% that must be paid on the day of sale, you only have about 28 days to find the rest. That means if you have not already received the money from the sale of your present property, you need a healthy bank balance or a mortgage already agreed and waiting. Remember that once the gavel bangs down, you have a legally binding contract to fulfill.

Add 10% to guide price

In a lot of cases the property will sell above the guide price, due to interested bidding. The low suggested figure, that initially lured you to the auction, is only a guide and you can expect to pay more.

The price you pay for a property is only the beginning. You will needs to consider the following:

There’s a fee from auction houses, which could be around £1,000. With councils you may also be asked to cover the vendor’s costs. There may also be some advertising costs to cover. It is wise to consider in total between 2% to 3% of the selling price, to cover these areas.

Further costs after the sale include, repairs, moving, legal bills, just make sure you have enough money.

Don’t get carried away

When the adrenalin is pumping it is very easy to start bidding for something you never intended going for. If you haven’t already done your homework on a particular property, then don’t bid for it. Likewise, don’t go over your budget to acquire something, unless you are very sure that it is still the bargain that you wanted and you can afford to buy it whilst still affording to make the necessary improvements, etc.

Know what your property is worth

You may have an idea of the value, but getting in a professional appraisal may be well worth the cost. They can tell you exactly what you need to do to improve your chances of a good selling price. Likewise a practiced eye can tell you the potential pitfalls in the property that you may be interested in buying. Get a survey done and even take along a competent builder to have a good look. Structural problems are not always evident. If it all looks way too good a property for such a low asking price, then find out why, there is sure to be a reason.

Auction House London brings you the best advice on selling and buying property at auction.