How Do You Buy At Auction ?

Aletank

I'm just wondering what the process is for buying at a Property Auction .
Do you have to register to bid ?
Is there any fees for the buyer on the hammer price ?
How soon do you have to hand over a deposit/cash etc ?
Once the hammer goes down, Is that just like having a offer accepted at a Estate Agent ?

Thanks

martinsurrey

a simple goolgle search will tell you everything you are looking for.

http://www.propertywide.co.uk/buy/guides/guide-to-buying-at-auction/

hazyjo

All your questions should be answered in that link, but I wanted to spell out that no, it's not like 'having a [sic] offer accepted at a [sic] Estate Agent'. It's like exchanging.

Make sure your eyes are wide open before even contemplating auction. Not something I'd touch with a bargepole (unless maybe I was buying cash!). You often have to complete within 14-28 days of the auction.

Jx

Aletank

Yeah, thanks for the replies.
Register at start with ID
A instant 10% deposit
£1000 fees
Solicitors/Mortgage inplace etc

Thanks Again

kingstreet

Make sure your solicitor visits the auctioneer's office and views the legal pack before the auction.

Ensure you have at least a mortgage report and valuation, or preferably a survey carried out and have a mortgage offer in your hand before you bid.

There is normally a reason why a property is in an auction, finding out what that reason is, should be your first priority.

Werdnal

And, as they always say on "Homes under the Hammer" - find out if there is a legal pack for the property and get a copy to read BEFORE going to the auction, and get property legal advice on anything in it which you are unsure of or raises concern. Once that hammer drops, you are bound to complete the transaction, and if you have failed to pick up on any problems, legal issues, covenants and restrictions on the property, tough - you should have done your homework first!

You usually need to complete within a specific timeframe, or you will lose your deposit and fees.

Properties at auction are normally there for a reason - be wary of buying something with tenants (you will need a BTL mortgage and be tied to whatever contract those tenants already have). Also look out for non-standard construction or structural issues, meaning it likely unmortgageable. Damp, fire damage, vandalism, poor area, subsidence, mining activity, flood risks - all the things that normal searches, solicitors and surveys would pick up through a "high street" sales, but you will be responsible for verifying before you start bidding!

G_M

Aletank wrote: »

Yeah, thanks for the replies.
Register at start with ID
A instant 10% deposit
£1000 fees
Solicitors/Mortgage inplace etc

Thanks Again

This is a very simplistic resume.

Google house auctions and read at least 3 of the guides that come up. In full.

Better still, borrow (free) a book on the subject from your library.

Then attend at least 2 auctions without taking your chequebook, ID or cash! Just watch and learn.

Only then start thinking seriously about buying at auction.

mustangu

Aletank wrote: »

I'm just wondering what the process is for buying at a Property Auction .
Do you have to register to bid ?
Is there any fees for the buyer on the hammer price ?
How soon do you have to hand over a deposit/cash etc ?
Once the hammer goes down, Is that just like having a offer accepted at a Estate Agent ?

Thanks

Nothing like buying through estate agents. With a offer through a estate agents you can still pull out of the deal. When you win the auction the property is yours, you cant pull out.

hazyjo

Also, just to be totally clear - mortgage in place means an actual mortgage offer on the property you're hoping to buy - NOT just an Agreement in Principle.

Obviously, after spending all that money before the auction, it may go for way over your budget and your money will be down the drain.

You MUST have a maximum bid in mind and stick to it.

Jx

AlexMac

Agree everything above. The only time I ever bought at auction I was a bit naive; I knew that completion had to be done in 28 days and that if I failed to complete in time, the vendor would simply keep my 10% deposit and stick the house back in the next auction; ie that I was committed when the hammer came down, having already advanced a sum equivalent to the likely deposit prior.
But my bank had given me a solid oral in principle offer of the mortgage after I described the proposal to them (needed new roof and full internal refurb, so big potentail profit) so I went forward. I nearly learned an expensive lesson. 3 days before the completion deadline, and after their valuation survey, the bank (NatWest) confirmed their offer in writing...BUT... subject to a 100% 'retention' pending 3 more surveys (timber/damp, roof/structural, and incredibly, tree survey!) which I had to comission and pay for. In other words... no loan.
Luckily I'd smelt a rat and had applied for pulled off another loan just in time, so the Halifax saved my bacon and I made a fat 100%-plus profit when I sold the by now beautiful house 3 years later. My wife to be wasn't too impressed; we were getting married a week after completion; stressy or what?

So beware! The one more straightforward lesson I learned is that in the case of that auction-house at least, you can set an upper limit then get the auctioneer to bid for you. I did, as I thought I couldn't make the auction due to work. In the event, I did sneak out on the dayy to watch my lot go through, but it was a lot easier watching a professional bid on my behalf, and I assume that I could have stepped in if I'd wanted to break my pre-set ceiling.