It is abundantly clear to me with the popularity of TV property programmes, buying property at auction has never been more popular. The prospect of picking up a bargain has become the method of choice for many developers and investors throughout the UK. Purchasing a property at auction can be both exciting and financially beneficial. However, there are pitfalls to avoid.
I am often asked about the process and things to watch out for when buying property, either commercial or residential, at auction. So whether you are looking for a dream home, a property for the rental market or a property with renovation potential, I thought it would be useful to set out some of my top tips that should act as useful guide. Hopefully, avoiding some of the obvious pitfalls, will help you to prepare for a potential purchase.
1. Finding a Property
There are a number of ways in which to find a property at auction. These include auctioneer’s catalogues and estate agent’s listings. The catalogue will normally contain guide prices and information on the lots included in an auction.
Identify the geographic area that you wish to look in. Widen or narrow your search in order to find the right property. All the latest auctions can be found by visiting www.propertyauctionaction.co.uk
3. Guide Prices
A guide price quoted is simply an indication of the minimum price the lot is expected to achieve at auction. It’s possible no bids will exceed the guide price; it is more than likely that they will. Calculate your budget based on realistic figures, rather than using the guide price.
4. Don’t Skip the Checks
Research the property and the area thoroughly. Is the documentation an accurate reflection of the property? Seek professional guidance on the Title and undertake the customary searches and enquiries.
5. Viewing the Property
Visit the property and check out the surrounding area. I am amazed by how many don’t even view a property, let alone start to consider the condition of a property. I would always suggest taking a surveyor along with you especially for older properties. They can advise on structural issues that may cause future problems.
6. Register your Interest
Contact the auctioneer to register your interest and take the opportunity to ask questions about the property e.g. current condition, neighbourhood etc. and how much interest has been shown in the property so far.
7. At the Auction
Set a ceiling price and stop bidding when the price gets to your limit. Do not get carried away with the emotion of the auction room. Beware, this is easily done!
8. Sort your Finances
Have all financial plans in place and all relevant paperwork so that you can complete the transaction within a 30 day period. This will include having the ability to put down a deposit of ten percent on the day itself.
Auctions can be fun and exciting. There are many opportunities to pick up a bargain or a property that is slightly unusual. Many local authorities will use an auction as a method of disposal as it provides a definite date of sell and offers some certainty. However, when the hammer falls the deal is done, so be careful as well. TDA is offering the former Tor Hill Day Centre in Torquay at auction on 13th September 2018 through Clive Emson Land & Property Auctioneers www.cliveemson.co.uk
Paul Palmer is the TDA Estates Manager and can be contacted on [email protected]