5 top tips on how to be successful at property auctions in the uk.
Property auctions in the UK have become the thing to talk about at dinner parties over the past decade. There has always been an interest in property from the average man on the street ever since Margaret Thatcher brought in the ‘right to buy’ council houses scheme back in the eighties, which meant for one the first times, owning property was not an impossible dream for the man on the street. Auctions historically can be a great place to buy property. However, over the previous few years, bargains have become harder to find, primarily because of the increased numbers of people looking for them due to TV programmes saying what great deals can be done there. If you want to be a success at auctions then following the tips, guidelines and insider secrets below might help you do just that.
Tip 1
Always, try to visit the property before hand and try and if you are really interested in it try and get your hands on the legal pack for the property. You need to consider whether to have a survey done or not – this is a big decision – since you might pay for a survey but not end up winning the bid for the property. But if you don’t get a survey done you could miss a big problem that could cost you thousands to put right. After you are experienced in Property you will probably begin to trust your own judgement more and be able to tell whether the property is basically sound just by examining it yourself.
Tip 2
Auctioneers can legally do what they call take off the wall bids, or false bids. This entails them taking imaginary bids to keep the momentum of the bidding going or to start off the bidding, they could also potentially have someone in the crowd they are working with that bids to get the price up but has no intention of buying the property. Beware of this, it is totally legal providing the false bids do not exceed the reserve price.
Tip 3
If you are really interested in a property you could try and purchase it before it even goes to auction by contacting the auction house. A lot of properties at auction will not be able to be purchased in this way because they are repossessed properties being sold by banks etc. and legally they need to be seen as selling the property on the open market in a fair way, hence it going to auction and going to the highest bidder. However many other properties never get to auction because the vendor has accepted a suitable offer prior to the auction. Keep in mind that a lot of vendors want a quick sale so they can be desperate for the auction day to come because they need the money urgently, so if you are able to buy the property from them before the auction then this can be a great deal for them also.
Tip 4
Don’t right off a property that you where bidding on just because it goes unsold at auction. If the reason was that the reserve price was not met, be sure to find the auction staff or the vendor himself straight away – not after the auction – but straight after the lot goes unsold and try to negotiate. If you get to the vendor soon enough you might find that all you need to do is offer an extra £1000 or so more than the closing bid and the property is yours, sometimes you can pick up great bargains this way. But you need to get to the vendor before others interested in the property do.
Tip 5
You must have worked out the figures before hand know exactly what you can afford to pay for the property. The general consensus is to have a limit in your mind and don’t go above it know matter what. However if you are good at reading people in the auction and you feel that if you just went £500 over your limit you would get the property, then use your discretion. But beware once you go even a penny over your limit the temptation to go £4,000 over your limit may be to strong as you get carried away on the roller coaster of emotions.
Remember to have your finances in place before the auction. You will generally have to put down a 10% deposit at the auction and the rest payable on completion – which is generally around 28 days but it can be less on certain lots so make sure you have checked the details of the property you are interested in thoroughly and make sure you can not only get your hands on the deposit but that the property is mortgagable and that you can get a mortgage on it in the specified time.
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