A considerable amount of time and money can be saved at house auctions; where it takes minutes rather than months to buy a property. But bidding isn’t for the faint-hearted. To stand a good chance of securing a good investment at a property auction, it’s important to know what to expect from this intense, competitive environment.
The number of properties sold at auction has grown rapidly in recent years. In 2014, auction sales were up by 133% compared to the previous year. Terraced houses are the most popular type of property, accounting for approximately 40% of sales, while flats and semi-detached homes are also in high demand.
The following tips from The Buy2Let Shop will help you to come out on top at property auctions.
Do Your Homework before Buying a House at Auction
When the hammer falls at a property auction, you’re legally committed to the sale, so you need to be certain before you start bidding. The first step is to study the auction house’s catalogue and research the properties that you’re interested in.
Arrange viewings of the lots which catch your eye. Check that properties match their catalogue description and get professional advice on whether you’re likely to get a good return if you decide to invest. Consider taking a property investment seminar to develop your knowledge of the market.
If you’re new to property auctions, sit in on a couple before you get involved. They’re free to attend and you’ll be in a much better position if you have a feel for the process before you start bidding.
How Much Are You Prepared to Pay?
Set your budget and bidding strategy – and stick to it. Check that the property is worth the amount you’re willing to pay and once bidding has started, resist the temptation to exceed your budget. Auctions can be great places to buy investment properties, but it’s easy to overspend if you’re not disciplined.
Make Sure You’re Seen
Check that you’re visible to the auctioneer and his spotters. If necessary, stand up to ensure your bids aren’t missed. It’s also worth arriving early and having a look around the room to get a sense of the competition you’re up against.
Find Bargains at House Auctions
Properties are often up for sale at auction because the seller is keen to shift them as quickly as possible. This puts you at an advantage when it comes to bidding. If the seller has put their property up for sale to clear debts, or due to repossession, they may well be prepared to accept a lower price.
Don’t be Fooled by the Guide Price
It’s easy to be taken in by strikingly low guide prices. But in reality, properties often go for considerably more. Be realistic about your budget and aim for an investment property with a guide price which is at least slightly lower than what you’re prepared to pay.
Making a Bid
You need to be 100% sure about the property you bid for. If yours is the last and highest when the hammer falls, you have made a successful purchase. At this point, you are legally committed to completing the sale and will be required to pay 10% of the price of the property before you leave the auction.
The Buy2Let Shop – Property Investment UK
If you’re considering bidding for a buy-to-let property at auction, The Buy2Let Shop is here to help. We provide advice on investment properties for sale and how to negotiate a good price at property auctions. We also offer property investment seminars to make sure you’ve got all the skills and knowledge you need to be successful at auctions. If you’d like to find out more about our services, visit our website today.