How to buy a property at auction

Buying a property at auction can be an excellent way to buy a property quickly without the hassle of the chain that can be a part of buying a house in the more traditional way.

As with any property purchase, it can come with its own complications; you could become involved in a bidding war with another potential buyer and as you may have already invested in researching the property you could lose that money if you are not successful in the auction. However, it is important to conduct the proper research beforehand as if you are the successful bidder the purchase is binding, no matter what you find out afterwards.

In order to achieve the best outcome at auction, it is important to be aware of the process before you start. Here, we detail our top tips for buying a property at auction to help you find your dream home.

1. Find the right auction house – before you start, you should consider the area you would like to buy in and find the right auction house in that area. You can research online before asking to be put on their mailing list and requesting a property catalogue detailing the properties listed in the upcoming auction. This catalogue will also include viewing times and guide prices as well as the date of the auction. Also, read the small print and the terms and conditions of the auction house which we can help you with.

2. Research the properties – this is probably the most important stage to ensure a successful trip to the auction.

Make a shortlist of the properties that you are interested in from the auction houses' catalogue and book appointments to view the properties. Make sure to conduct a thorough inspection of not only the property but also consider the surrounding area.
It could be prudent to take an industry expert with you such as a builder. They can then estimate how much any repairs or restorations may cost you so you can take this into consideration when making a bid. Even if the property is in a good condition, they can spot potential issues that you may not be aware of and will provide a useful third party perspective.
Do comparisons between the price listed in the catalogue and other properties in the area; this can help you determine your maximum bid.

3. Visit an auction before attending the one with your chosen property - this way you will feel more familiar with the process and spot things you need to be aware of. This will also help you understand how the pricing may differ between the guide price and the price a property actually gets bought for.

4. Consider having a survey done on the property – whilst this will be a financial investment and you run the risk of losing that money if you do not buy the property, it would be worth it if you are serious about the property. If you are the successful bidder there is no going back.

5. Review the auction pack – the seller’s Solicitor would have helped them prepare this important document, which will give you a valuable insight into the property. It would be important to have the auction pack reviewed by us, as we can help you understand the details, as well as whether there’s any hidden covenants or restrictions on the property, or anything else which may deter you from purchasing the property.

6. Understand the financial commitment.

You will need to set your maximum budget to include not only the price of the property, but also any renovations that are needed.
There will be both a guide price and a reserve price listed in the catalogue; the guide price is the price where bidding will commence and the reserve price is the lowest figure the seller will accept.
It would be imperative to obtain a mortgage in principle before attending the auction if you are intending buying with a mortgage.
There will be payments that you need to make on the day if your bid is successful.
Your purchase cannot be dependent upon matters over which you have no control, for example the sale of your present property or financial arrangements that you hope may come together in time.

7. How to act on the day – auctions can either be exciting or nerve-wracking; either way, you need to be prepared.

Getting to the auction early can set up how your day will go as you can choose a spot where you are comfortable and you can be seen.
Make sure you stay within your budget and don’t get carried away with the bidding.
Ensure you have brought all of the necessary identification and paperwork with you, and are able to satisfy the auctioneers’ request in relation to paying the deposit, which is immediately due.
If the property doesn’t reach the reserve price, then do not worry as it may be that the seller will take another offer once the main auction is over.

If you have bought a property at auction, there will be a number of legal matters that you will need us to complete, including:

Finalising the completion of the purchase
Sending you the relevant documents to sign, including the transfer deed
Checking the source of funds and asking for the final balance
Registering your property at the HM Land Registry.

Buying a home is a big commitment and the process can make it more so if you are buying through auction as you are committed as soon as your bid is successful. We can help you understand your obligations and the process more, so contact our experienced and specialist Auctions team today on 023 9277 6569 or email auctions@warnergoodman.co.uk to discuss your plans.

To speak to one of our experts please call us