Top Tips for Buying a Property at Auction
There are many ways of buying a property these days and knowing which is the best way can be a bit daunting. One way of landing yourself a great bargain is buying through auctions. Not for the faint hearted, auctions can be both exciting and nerve racking, particularly for first-time bidders. It is important not to get caught up in the moment and end up bidding more for a property than you intended or can afford.
With this in mind, we offer some sound advice when it comes to buying at property auctions. Here are their top tips:
Have Your Finances in Place Before the Auction
Although auctioned properties can be bought using a mortgage product, due to the short completion time required, it is vital that you have your finances in order before the auction day. Remember to set a maximum budget you are willing to go up to, and do not exceed it. Bridging finance is a popular way of funding these types of purchases as they ‘bridge the gap’ until a mortgage or sale of another property can be secured.
View the Property
Make sure you arrange a viewing of the property with the auction house. Just because a house appears to be a great deal, doesn’t mean it actually is. Have a good look around the property, bearing in mind any repairs or renovations that are needed, which must be factored into your budget.
Don’t Get Swept Up in the Moment
Stick to your budget! It is very easy to get caught up in the excitement and end up bidding more than you wanted to. Most importantly, remember, when the gavel goes down you have made a legal commitment, so you will need to be able to pay the amount you have bid.
Know the Time-Scales
Unlike typical property sales, funded by long-term mortgages, the time-scales for property auction sales are significantly shorter. Mortgage sales can take months to complete, whereas auction sale contracts are exchanged immediately after the bidding is over. Make sure you familiarise yourself with all the legalities surrounding auction sales and ensure your finances are in order.