Buying a house at auction – five things to remember before placing a bid

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buying a house at auction
Chris and Georgina Hammond from Beau Property say that property auctions shouldn’t be entered into lightheartedly, despite what TV may have you think.

‘His palms are sweaty, knees weak, arms are heavy,’ there’s a gold star for anyone who guesses the lyrics. I’m not referring to an Eminem rap battle circa 2002, but the feeling you get when your lot is about to come up at a property auction. buying a house at auction

We have had some great successes at auction. In-fact, it is by far our most successful way of buying property. Homes Under the Hammer is one of the BBC’s most popular daytime TV programmes – now in its 22nd series. However, not everyone finds buying a property at auction so easy. And for every auction success story, there are many more cases of regret.

It’s all too easy to continue bidding far beyond your agreed limit in the heat of the moment. With that in mind, here are five essential rules to follow when you next step into the auction room:

View the property beforehand

This might sound like a given, but there are a lot of people who get carried away on the day and start bidding on properties, just based on the photos in the sales brochure. Photos might speak a thousand words, but they’re not necessarily the truth. Nothing compares to setting foot inside a house yourself, getting a feel for it and peeking into corners the brochure photographs might conveniently choose to miss-out.

Review the legal pack

For properties we’re seriously interested in, we always get our lawyer to look over the pack to ensure there are no sneaky conditions that will come back to haunt us in the future. The £100 this costs, can save far beyond this sum in the long-term, especially for leasehold properties.

Do your due diligence

What have other properties on the street sold for? What is the commercial value if you can’t get change-of-use? What is the exit strategy? These are all questions you should be asking before you place your first bid. Lizzie Fraser’s article on due diligence has some handy transferable tips that you can bring to any auction deal.

Have your finance lined-up in advance

If you’re not a cash buyer, waiting until after the auction to sort out finance is a risk you really don’t want to be taking. You could either end up paying huge interest on a bridging loan, or worse still losing your deposit if you can’t complete.

Stick to your agreed price

Decide on the highest price you’re willing to pay for a property and stick to it. It’s all too easy to get caught up in the excitement of the room and convince yourself the extra few pounds don’t matter. They do. You don’t want to wake-up the next morning, out of pocket and seeing your dream house transform into a nightmare before your eyes.

Beau Property

Words: Georgina and Chris Hammond (Beau Property)

 

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