Paul Georgian Owner

The Buy2Let Shop Limited

The Buy2Let Shop Limited is a property investment company based in London UK and deals with investors at novice/beginner level or advanced property investors. We offer professional services to vendors looking to sell their home to investors looking to build their portfolio.
The Buy2Let Shop Limited South Tower, 26 Elmfield Road Bromley BR1 1WA
020 3837 3300
8 March 2017
8 March 2017,
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Buying a house at auction is a great way to find a bargain buy-to-let property for sale. On a good day, it’s possible to purchase a property for as much as 15% lower than the market value – which for the average house, equates to saving thousands of pounds.

However, it’s unwise to attend a property auction if you aren’t familiar with how they work. House auctions offer great property investment opportunities, but there are pitfalls involved – and mistakes can be costly.

Here’s a guide to the common problems involved with buying a house at auction, and how to avoid them.

Property Auctions – Mistakes to Avoid

  • Not getting your finances in place. Purchasing a property at a house auction is very different to buying from an estate agent. You need to pay 10% of the final sale price on the day, and you must pay the remaining 90% within 28 days. Check your finances carefully. If you need a mortgage to fund the sale, you’ll need to get this agreed in principle before you start bidding.

 

  • Not arranging a viewing. Some investors choose to buy blind, but this is a high-risk strategy. Without a viewing, it’s impossible to tell whether the property has any major structural faults, for example. You’ll also have no idea what the surrounding neighbourhood is like – and it’s difficult envisaging what the rooms / dimensions / appearance is like without seeing the property ‘in the flesh’.

 

  • Not sorting out insurance. Once the gavel lands, the property is your responsibility. That means you’ll need to get insurance sorted out as speedily as possible. Be aware, if you fail to do so, and the property burns down even an hour after the auction is finished, you’ll have lost the property – and you’ll still need to pay for it!

 

  • Getting carried away. It’s very easy to get over-excited at a house auction, particularly if you really want the property. As a result, many people have over-bid on the day, only to realise they’ve committed to paying over the odds. Keep a maximum figure in your mind, and don’t go above it under any circumstances.

 

  • Not getting quotes for building work. ‘Doer-upper’ properties often offer excellent ROI. However, it’s vital to know how much the building work will cost you, so you can factor it into your expenses. When you view a property, it’s worthwhile taking a builder with you, to get a realistic idea of what price you’re looking at.

 

  • Not reading the paperwork. All houses at property auctions come with a legal brochure, which are available to request. Make sure you do so, and even better, show it to a solicitor. This will protect you from any unusual legalities associated with the house – for example, boundary issues or problems concerning rights of way.

The Buy2Let Shop Limited

If you’re thinking of buying a house at auction, The Buy2Let Shop can help. We’re a team of expert property investment agents, and we’re here to secure the ideal investment house for you, at a price that suits.

We also have a range of properties on our books, which are priced competitively to sell. To find out more, simply visit The Buy2Let Shop website today.

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