Buying property at auction part 1

by Mark Johnston

All potential home buyers know that falling house prices are not good news, however they are creating other opportunities such as being able to ‘snap up’ heavily reduced properties at auction.

Until recently, auction properties were mainly bought by investors looking to sell them on at a profit, but it seems now that more and more average buyers are starting to use property auctions as a way to buy a new home cheaply and quickly.

Auctions often offer a wide variety of properties, from the standard two up two down to the more unusual, for example churches and lighthouses.

David Sandeman, managing director of auction information provider Essential Information (EI) group, added “repossessions are now making up 20% of the properties on sale at auction”.

Most auction properties are on the market because:

–          of repossession, bankruptcy, or because the seller needs to clear debts

–          the owner has died and the property is empty

–          they need some or a lot or renovation work

–          they are unusual so are difficult to value

Buying a property at auction no matter what it is can be potentially profitable, it avoids all the lengthy purchasing procedures that usually have to be endured and also the risk of the sale falling through at the eleventh hour, as soon as the hammer falls that’s it the property is sold.

Those buying at auction will find themselves able to target properties priced to sell rather than sit in estate agents windows for months on end.

Getting started:

There are several websites around that can be used to find out about auctions and view details of properties for sale.

Once an auction has been found it is then advisable to get hold of its catalogue, it is always best to turn up at an auction being prepared, knowing all you can about the property your interested in. through research should be done such as comparing prices and conditions of properties to others that are similar for sale.

Once a possible property has been found viewing is essential, contact the auctioneers to arrange a viewing much in the same way as if you went to an estate agent. These properties can be in a poor state so it’s worth checking them out. There is usually only around 4 weeks between the time the catalogue is issued and the date of auction, so viewing needs to be carried out early.

There is usually a legal pack available and it is worth letting a solicitor have a look at this as they can check out make sure =e that there are no legalities that could have potential implications on the value of the property.

It is also essential to have a survey carried out on the property. Richard Morea, technical manager at mortgage brokersLondonand Country, says “you will lose your survey fees if your bid is not successful, but a survey is essential. Just because you may be getting a bargain, do not cut corners areas such as survey and searches”.

 



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