Buying cheap

Mandaloiian

Hi peeps
was wanting to know about buying property’s cheap at auctions the costs involved Anything to look out for any costs to consider as would love any advice at all Completely new to it all I’ve seen homes going for 30k at online auctions and was just thinking it’s a better investment then buying a 30k car And if I was to go down the mortgage route I can’t imagine the payments being much I’m on a tight budget at the moment so thought this kind of home would be better.

LadyGnome

DH does up property and we have bought a couple at auction. 

Here are my thoughts in no particular order. 

There is often a reason why the property is being sold at auction rather than on the open market. It may be a repossession, non-standard construction or a short lease.  

You will need to pay an admin fee to the auctioneer. 

The legal pack is often only posted a short time before so you need a solicitor lined up unless you can review it yourself. 

Watch out for any special conditions dumping some of the Vendor’s costs on to you. 

Purchase at auction is exchange of contracts so you need to insure the property straightaway. 

Completion can be quite quick eg as little a week or two after the auction so if you need a mortgage you need it lined up. 

You only get a short time to view and some auction properties haven’t been well maintained. 

If you see any reference to tenants or someone in occupation be very careful as you may find yourself with a messy eviction before you can even get in. 

Guide prices are often no where near the actual sale price. 

Make sure you understand the area you are buying in. Is the property cheap because it is the middle of gang warfare or next to a sewage works. 

Know how much a property in good condition in the same area would sell for then take away the refurbishment costs for the auction property and that will give you a sense of your ceiling price. (DH and I have watched people get carried away at auction)

Mandaloiian

Hi thank you for your reply I think I’m just a little starry eyed about it all as there was a property that looked just right And I’ve been regretting not taking it as it sold for 32k the work was just a basic modernisation needs the area looked fine and for 32k to get a freehold 2 bed sounded amazing to me to I’ve been kicking myself about it but I know I shouldn’t rush in so thank you for your help.

LadyGnome

You can get some genuine bargains at auction so don’t rule it out. However, do your research and view some properties (online for now!) including looking at the legal packs etc.  and watch the auctions. It’s unlikely prices are going up so you might find other similar options come up. 

Grumpelstiltskin

Unless you have cash you MUST MUST MUST have your mortgage sorted first.

Then binge watch Homes under the Hammer to find out the common pitfalls, number 1 read the legal pack, number 2 have a reliable builder in tow, number 3 it will cost more than you think and number 4 read carefully the  auction catalogue that will give details of additional costs involved in buying.

If you are still happy then go for it.