UK Property Auction Tips
Generally the properties are on the market due to bankruptcy or repossession or to clear debts, rather than simply because the owners wanted to move. As a result you may be able to pick up a bargain. However, by no means are all properties a bargain. If there is a lot of competition among bidders the property price will rise and become less competitive.
By contacting auction houses and asking to be put on to mailing lists. You should then be sent details of different auctions and the properties for sale.
If you like the look of a property, you should arrange a visit to see it. If you still like it then you will need to contact a chartered surveyor to have a homebuyers’ report carried out. This is vital, as it will advise on the condition and value of the property.
You will also need a solicitor to carry out local and national searches and check the title deeds for any convenants or restrictions on the property.
Once you have decided to bid for a property you will need to agree a mortgage with a lender.
If you are the last and highest bidder when the auctioneer’s hammer falls it means you are the successful buyer. This also means you are legally committed to paying the price you bid and completing the sale.
You will need to pay 10% of the cost of the property before you leave the auction, and the balance has to be paid in full within 28 days.
• This is Money’s brilliant Mortgages section is packed with tips on getting the best mortgage. If you have a direct question, ask our mortgage experts and if you’re interested in property market news, see our house prices section.
Don’t forget to take into account the potential cost of advice. You will also need to pay stamp duty on properties costing £60,000 or more. The auctioneer may demand ‘buyer’s premium’ equivalent to 1.5% of the sale price. There is also an administration fee, typically £150, paid to the auctioneer.
• Go to at least one auction as an observer before bidding to gain experience.
• Check with local estate agents beforehand to find out what similar properties in the area have fetched.
• Look out for unsold lots, as both the vendor and the auctioneer will be keen to sell and may accept a lower offer.
• Consider properties with a short lease – typically less than 65 years – which should be be relatively cheap. Once you have bought it is normally easy to extend the lease and increase the value.
• Get a mortgage offer before going to an auction. Make sure the lender is able to complete your application within three weeks of the sale. If you don’t have the money in your account in time to pay for the property you could lose your deposit.
• Finally the golden rule – set yourself a price limit and don’t go above it.
UK Property Auction houses
Allsop 020 7437 6977, Allsop.co.uk
FPD Savills 020 7824 9091, Fpdsavills.co.uk
Strettons 020 8520 8383, strettons.co.uk
Countrywide Property Auctions 01245 344 133, Rightmove.co.uk/cpa
Barnard Marcus 020 8741 9990, Barnardmarcusauctions.co.uk
The Essential Information Group offers a property auction search service, 01737 232 289, eigroup.co.uk.
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