When seeking property investment opportunities, some people are deterred by rising prices; not to mention the growing trend for gazumping. Seeking buy-to-let property for sale or a great development opportunity can be tricky, especially when looking in a desirable area where property prices are high.
This goes some way to explaining the growing popularity of property auctions. If you’re considering buying a house at auction but aren’t sure what the benefits are, here’s a brief overview.
House Auctions – The Lowdown
House auctions regularly take place across the country. Generally speaking, the protocol is to examine the property online first, request details prior to the auction itself, then bid on the day. Most seasoned bidders go to auction with a firm idea of what they want to pay, and stick to a pre-agreed budget.
There’s a few things to be aware of when purchasing houses at a property auction:
It’s legally binding. Once the hammer falls, you’ve committed to buy, and failing to complete the purchase is illegal.
There’s no room for haggling. The agreed price at the end of the auction is the price you’ll pay – no exceptions.
Properties often have reserve prices. However, if the property doesn’t meet the reserve price, the vendor may choose to accept your bid after the auction.
10% deposit required. You’ll need to pay a 10% deposit if your bid is successful, and must also pay the 90% remainder within 28 days.
The Benefits of Buying a House at Auction
Here’s just a few reasons why house auctions make real sense in financial terms.
Big savings. According to Karelia Scott-Daniels of Manse & Garret Property, you’ll make an average saving of between 10% and 20% if you buy a property at auction. Given that stamp duty has just risen for buy-to-let property for sale, this offers significant financial advantage. Additionally, properties often come to auction that require cosmetic or structural improvement – and if you’re a skilled developer, this presents an opportunity to make a profit.
Quick sale. Investing in UK property via the conventional route (an estate agent) can often end in frustration and heart-ache – particularly when vendors pull out of the sale at the last minute, or when things drag on for months. At a property auction, most vendors are keen to sell their properties quickly. Indeed, it’s common for banks and councils to sell properties at auction – and they often want a seriously speedy sale.
Legal assurance. At auction, you’re required to honour your end of the bargain and complete the sale. However, the same applies to the seller – which means you’re less likely to experience disappointment.
Help With Your Property Auction
If you’re keen to learn more about house auctions and how they can be used to grow your property portfolio, talk to The Buy2Let Shop team today. We’re property investment agents in London, and we have specialist knowledge of the process of buying a house at auction. We also have a wide range of properties on our books that aren’t available on the general market.