Buying At Auction – Is This The Way To Get On The Property Ladder?

How to make a successful bid at an auction is explained by Angela Williams, who recently acted in the auction of a mill and cottage in Chumleigh that featured in the recent TV programme Property Matters.

When house prices drop or there is a rise in mortgage repossessions more properties are sold at auction, and it can be a profitable way to purchase property.

So, how do you go about buying a property at auction?

First, find out when and where auctions are taking place. Look in the property pages of the Plymouth Herald and other local papers. Many estate agents hold regular auctions and will gladly send you details.

Look through the agents’ brochures or catalogues and arrange to view any properties you are interested in before the auction. Just like buying a house through the traditional conveyancing process, more than one viewing is advisable so you are aware of every facet before you begin bidding. Very often auction properties are unusual or in a poor condition, so it can be advisable to take a builder, architect or surveyor with you.

A legal pack will be available for each property which needs careful studying. This pack will detail points that may have an impact on the value of the property and will include searches but not a survey. If you want a survey then it needs to be done before the auction.

It is a good idea to visit an auction where you do not intend to bid so as to get a feel for how bids are made and to see what the procedure is. That way when you wish to purchase at auction, the process will not seem quite so alien.

If you want to bid, you will need to have a 10% deposit available on the day of the auction. There will be a guide price for each property but prices often exceed this on the day. You should also have finance in place to enable you to proceed to completion. If you bid successfully, contracts are exchanged and the deposit paid on the auction day. Completion will often be fixed for 28 days after the auction.

Given the speed that auction properties are sold and completed it makes sense to have a solicitor in place to act on your behalf before you bid. Your solicitor can advise you on the contents of the legal pack and raise enquiries of the seller before auction day so that when you bid you do so with full knowledge of the property. Immediately following the auction the seller’s solicitor can contact your solicitor in order to finalise the documents for completion.

Published 29/07/2008. The author of this article is Angela Williams