In spite of market uncertainty, house auction sales have boomed in recent months. Once seen as a less attractive, alternative way to purchase property, property auctions are now being seen as a viable option, saving investors thousands of pounds in the process.
Here’s some more information.
Why Buying a House at Auction Works
Traditionally, some buyers are deterred from house auctions, due to their unpredictable nature. There’s no way of knowing how many people will be interested in the same property as you, not to mention how much they’ll be willing to spend on it.
However, attend a property auction on the right day, and it’s possible to save a huge amount of money when compared to average market prices. On average, most property investors save 15% – which equates to several thousands of pounds when buying a higher priced house.
They’re also a lot more straightforward. Once a sale has been agreed, contracts are immediately exchanged, which means there’s little chance of the purchase falling through. Indeed, it’s a legally binding process – once the gavel lands, both seller and buyer are committed – and gazumping cannot take place.
What About Funding the Purchase?
Buying a house at auction requires a level of ready funds, as you’ll have to pay 10% of the final price on the day, and pay the remainder within 28 days. The good news is, mortgage lenders are now a lot more flexible, and can supply mortgages tailored for a speedy transaction.
Of course, it helps if you have some equity to put down, as this is likely to mean a reduced interest rate for your mortgage. Remember, you’ll also need to arrange insurance for your new property – the moment the sale is finalised, it’s your responsibility.
Support With Buying a House at Auction
Understandably, some investors are nervous about the auction process, especially if they’ve never experienced an auction house environment before. It can be fast-paced and confusing, and many buyers worry that they’ll end up spending more than they intended to.
It’s a good idea to visit a property auction before you plan to bid, to get a feel for the process and what’s involved. If possible, bring a friend along for moral support (or even better, someone who is familiar with house auctions and who can offer valuable guidance).
A property investment agent may also be able to assist – which is especially valuable, as they’ll have expert knowledge of buying a house at auction, and will be able to help you secure the property at a good price.
House Auctions with The Buy2Let Shop
If you’re considering buying a house at auction, but are unsure about the process, talk to The Buy2Let Shop. We’re a team of specialist property investment agents, and we’re here to help you at every stage of your property investment journey – from finding the right buy-to-let property for sale, to securing the house at the perfect price.
To find out more about our range of services, get in touch via The Buy2Let Shop website today.