10 Top Tips for Buying at Auction
If you are one of the many people trying to get a foot on the property ladder or indeed trying to pick up a property bargain then buying at auction could be the answer. More than 30,000 properties are sold at auction every year in the UK. Get it right and a bargain can be picked up in seconds, make a wrong move and you could end up regretting it.
To make sure you ‘can keep your head when all around are losing theirs’; we’ve provided 10 Top Auction Tips;
To make sure you ‘can keep your head when all around are losing theirs’; we’ve provided 10 Top Auction Tips;
- Do Your Homework
- Understand How an Auction Works
- Beware the Hidden Costs
- Observation
- Unsold Lots
- Set your Price Limit
- Do not bid before the final count
- Control your Emotions
- The money matters
- If at first you don’t succeed…
Get a copy of the catalogue and understand the market you are buying in. It is also well worth asking why the property is on sale at an auction in the first place.
In an auction a reserve price is usually placed upon every property. In other words, if it doesn’t reach this price the property will not be sold. So as long as the reserve price has been reached and if you are the last and highest bidder when the auctioneer’s hammer falls it means you are the successful buyer.
Don’t forget to take into account the cost of surveys and legal advice. Also read the small print. Sometimes sellers ask for the auction fee and legal work to be paid for by the buyer!
If you are new to the auction game, make sure you go to at least a couple of auctions as an observer to gain the valuable experience you will need.
Always be on the look out for unsold lots. In this case both the vendor and the auctioneer will be keen to sell and may accept a lower offer. But consider carefully why it didn’t sell!
Probably the most important rule of buying at auction is that you must set your price limit before the auction and stick to it!
If you can hold your nerve, do not bid until the final count. Only the last bidder wins at auction and by letting everyone else show their hand you will know if it’s worth bidding for or not.
Never get caught up in the emotion of the auction and never bid above your preset price. Keep a clear, cool head, have patience and you will eventually get the property you want at the best possible price.
Having the finance in place with your mortgage lender before even walking into the auction house is essential. Once you've bought the property, you're committed to pay for it.
If you don’t get the property you want come back another day. Don’t buy another just for the sake of it! The good thing about auctions is that they are becoming increasingly popular so there is always another one around the corner and maybe next time you will find your dream home!
