Buying at Auction

mgmgrand1

Hi there
I am thinking of bidding on a couple of places at auction. The main reason being is that I want to pick up a place relatively quickly and possibly get a bargain. Now, I am aware that you buy this 'blind', however is it worth getting a survey done before hand? I will need a mortgage(a small mortgage of 50k I have a large deposit), and I am aware that if I do get the place and a survey throws lots of things up I will be refused on that basis.

Any other tips would be much appreciated!

Thanks!
M

Cheeky_Monkey

Providing you do it correctly, you most certainly will not be buying 'blind'.

You will have the opportunity of viewing the property several times, have a survey done and read the legal pack (either yourself or your solicitor).

It's not a given that if the survey reveals anything 'nasty' that you would automatically be denied a mortgage. It depends on many things including what the loan to value would be, the lender might just put a retention on it until the works are completed etc.

The key to buying at auction is not to get carried away. Work out your maximum bid taking all things into account and stick to it. I've seen so many properties sell for far more than their market value for this reason.

G_M

If you bid, and win, you HAVE to buy, So

1) before bidding you need to be sure the property is in condition you are happy with. Either look/decide yourself if you are competant, or get a survey done
2) you need to be sure you have the finance. So you need a FIRM mortgage offer. MIP is not enough! What happens if the lender values the place after the aucion and refuses your mortgage....?
3) you need to be sure the legal Title is good and there are no hidden ROW or covenants etc. So you need either to DIY the legal if you are competant or instruct a solicitor.

All this before you bid. It costs. And you may not win at auction, so it is speculating/gambling.

mgmgrand1

Thank You for the excellent advice. What is discouraging me to buy at auction is the fact I believe the guide prices on the houses I am looking at are 50k below the market value. I don't particularly want to spend money on a survey and valuation report only for the starting price to be already outside of my budget. I might try and attend a auction to see the nature of guide prices in relation to selling prices.

Thrugelmir

mgmgrand1 wrote: »

I might try and attend a auction to see the nature of guide prices in relation to selling prices.

At auctions of any kind. Far too easy to get carried away in the heat of the moment. Take your time to explore the opportunities and understand how it all works.

mgmgrand1

TY for the excellent advice. Think about the whole process it is too worrying for me to buy at auction. I'm the type of person who like to know where I stand. There are too many variables in place at auction.

Cheeky_Monkey

mgmgrand1 wrote: »

I might try and attend a auction to see the nature of guide prices in relation to selling prices.

That's a very good idea and something everyone should be thinking about when buying an auction property.

I've seen guide prices that are nowhere near the reserve price and conversely, properties selling for less than the guide, it all depends on the seller and how many people are bidding.

It is also usually possible to put in a pre-auction bid but you must be able to prove that you have the funds for it to be accepted.

G_M

mgmgrand1 wrote: »

Thank You for the excellent advice. What is discouraging ENcouraging...? me to buy at auction is the fact I believe the guide prices on the houses I am looking at are 50k below the market valueguide prices are very loose. .... I don't particularly want to spend money on a survey and valuation report only for the starting price to be already outside of my budget. I might try and attend a auction to see the nature of guide prices in relation to selling prices.

Properties occassionally go for less than the guide price.

They often go for considerably more than the guide price!

I would urge you to attend several auctions, with your hands in your pockets,
1) to see the price relationships, as you say and
2) to see how they work

Also google 'property auction' and read up all the info etc available on how auctions work and what you need to do. There's lots of advice.

Auctions have become popular since TV programmes in the last few years, but they are not for the faint hearted. They are still best used by investers, cash buyers, experienced property people.

The idea of a 'cheap' property, easily picked up, is a dangerous concept......

atppkr

G_M wrote: »

Properties occassionally go for less than the guide price.

They often go for considerably more than the guide price!

I would urge you to attend several auctions, with your hands in your pockets,
1) to see the price relationships, as you say and
2) to see how they work

Also google 'property auction' and read up all the info etc available on how auctions work and what you need to do. There's lots of advice.

Auctions have become popular since TV programmes in the last few years, but they are not for the faint hearted. They are still best used by investers, cash buyers, experienced property people.

The idea of a 'cheap' property, easily picked up, is a dangerous concept......

Fantastic advice here!!! GM you have a lot of sound knowledge and its great to see you help others!!
:money:

bridgin4u

We have set up a list of auctions in the uk which we hope you will find helpful, we hope to add more and more dates and times to the list over the coming weeks - PM for more information

gfplux

If you have not been to a couple of auctions yet you should do so. You would be a fool to think about this without that obvious experience.
It's like thinking about riding a bike without knowing what a bike looks like.