Property auctions are a great way to get your hands on a property you may have wanted. Whether you are buying for investment purposes or living in, bidding on an auction property can be pretty exciting. Needless to say, property auctions may not be for everyone.
As a word of caution, our opinion on property auctions is likely to be biased as we generally prefer property auctions. We find that as long as the requisite preparatory work is carried out, property auctions can be a speedy and secure way of securing a property.
The process of property auctions is simple. This article will help you understand what to expect when it comes to this type of sale. From the bidding process to the different types of auctions, this article will give you some of the pertinent information that you need to know about property auctions.
It is common knowledge that just as there are many ways to skin a cat, there are many ways to buy property. You could opt for the private treaty route where you find a real estate agent, negotiate with the seller, agree on a price and follow the conventional conveyancing process, or opt for auctions. We would opt for property auctions for some of the reasons we share below.
Buying property at auction is one of the least understood methods of buying property. That is why some steer clear of it. To enable you to make a decision as to whether property auctions are the best for you, read on to learn more about the process of bidding on properties at auction, what you should know before you go, what happens once your bid is accepted, and how to make sure your investment pays off!
How to Find the Properties You Want to Bid On
Finding the right property to bid on is easy; just look through the available listings online. The Essential Information Group is where you can find virtually every property auction in the UK. Here is a link to their online property auction platform: https://www.eigpropertyauctions.co.uk
Property auction listings, as mentioned before, are also available through public records and online databases. When you are searching for the property you want to bid on, there are a few things to keep in mind:
* The location of the property and its proximity to other properties- will it be near your home or office?
* The size of the property- does it seem like enough space for your needs?
* The property’s condition- is it in good condition, or does it require extensive repairs?
* Any zoning restrictions that might affect what you can do with this property.
Once you have found a few properties that interest you, then you’ll need to decide how much you’re willing to pay for them. The minimum amount set by the seller for an auction property is known as the “reserve price” and cannot be lowered. It’s important to note that many people submit bids below their maximum because they don’t want their competitors to know how much they’re willing to spend on a property. The critical thing is to ensure you do not end up losing your preferred property. It is also vital to ensure you do not get auction happy and get caught up in the auction excitement, and end up overbidding. It’s good to know when to walk away. If someone else bids on a property before you and offers more than what you were going to offer, then it’s okay. There are always plenty of other properties up for auction at any given time.
Setting Your Bidding Limit
Setting a strict bidding limit will help you avoid impulsive decisions in an emotionally charged auction environment.
So, how much should you bid? The best way to determine this is by carrying out a robust cost-benefit analysis and ensuring that the financial figures stack up. You may want to include the legal fees and other additional sums per the special conditions.
In determining the most profitable purchase price for the property you want to purchase, it may be beneficial to conduct a thorough analysis of comparable properties in the area. This will help ensure that you are not overpaying for the property and will be able to set a realistic bidding limit and hopefully get your preferred auction property at a great price.
Your plans for the auction property can influence your bidding limit. Things such as how long you want to wait before expecting any return on your investment could have an influence. If you are looking for fast cash, then you may want to set your maximum bid slightly lower than what you think is ideal. However, if you’re looking for a long-term holding period for this property, then set your bidding limit.
The Auction Process
The process for property auctioning is straightforward.
You first need to put your financial house in order before bidding for an auction property. Ensuring your finances are in order is an imperative preliminary prerequisite. You need to have sufficient money to complete the property auction purchase; otherwise, you may be in breach of contract and end up paying substantial monies in damages. A mortgage decision in principle is by no way a guarantee that you will receive completion funds. Ensure you are sure that the money will be released as this may depend on a whole host of other reasons to include a successful valuation.
You then need to find the property you are interested in bidding on. This can be the fun part. Property auction listings are available through public records or online databases, so it’s easy to find what you’re looking for. Viewing the property is essential. In the event that you cannot do the viewing, other professional companies can view the property for you and send you video or photographic evidence together with a detailed report of their findings.
We encourage you to read the auction legal pack as the devil is in the detail. So, please do go through it with a fine toothcomb as there may be additional costs and restrictions affecting your property use of the property. Some legal packs are notoriously riddled with legal jargon and the small print, which ends up being a big deal. That is why we offer competitive FIXED FEES to help you avoid the associated common pitfalls and save you from the hidden costs. Feel free to contact us: https://creativelegals.co.uk/auction-legal-pack/
Once you have found the property you are interested in bidding on, you will need to determine how much you are willing to bid. Remember, the reserve price is the minimum price that the seller is willing to accept. It is the bidding starting point. Some properties go on to sell for much higher than the reserve price.
An online auction house will then conduct an auction, during which other people can also place bids on that property. If your bid is higher than all of the others, then you will be the successful bidder: congratulations! But if not, don’t worry, because there are many other opportunities for bidding- if not with this property, then perhaps another one.
What Happens If You Win the Bid?
If you win the bid, the auction house will send you confirmation by mail and may also contact you by telephone.
The auctioneers will also make contact with your chosen solicitors to complete the conveyancing for you and register the title in your name. As specialist property auction solicitors, we are well-positioned to help you in your auction property purchase. Contact us for a FREE no-obligation consultation. If you have any questions about property auctions or how to bid on a property, feel free to contact creative legals for all your auction-related legal matters.