Auction tips for buyers and sellers 13th July 2022
Tips for buyers:
Arrange a viewing:
A property usually goes live four weeks before the auction opens, arrange a viewing beforehand. Thoroughly inspect it and the neighbourhood it’s in. Consider taking a builder with you so they can advise what work will need to be carried out and how much it’s likely to cost.
Research the area:
Always research the area prior to bidding if you do not live locally, check out previous sales prices for properties nearby and their condition. Or have a look at rental prices nearby if you are looking to do the property up and then rent it out.
Carry out searches:
We can arrange to be at the property if you wish for a builder or surveyor to go out, or perhaps you want a damp report or electrical report prior to bidding. Just make sure you leave enough time before the auction to get the quotes/reports back.
Set a budget:
Once you know what work needs to be carried out/how much it will cost and the value of other homes in the area, you’ll have an idea of your top budget for the property. This is the maximum price you’d be willing to pay, and you need to stick to it when bidding.
Get finance in place:
Buying an auction property with a mortgage can be difficult, as there are strict timescales to adhere to. We would therefore always enquire with your lender to make sure timescales can be achieved, otherwise financial penalties can be imposed
Tips for sellers:
Why sell your house at auction?
If you're looking for a speedy sale and certainty that a buyer won't pull out of the purchase, then property auctions are a good way to go. Once the hammer falls, the buyer has to put down a 10% deposit, then they have a month to give you the remaining 90%.
Properties sold by auction are generally those which need some work doing, as most buyers are cash buyers, buy-to-let investors or builders looking for small projects.
Online auctions provide an immediate exchange with a deposit of £5,000, this provides financial security for a sale to complete. Giving the seller peace of mind which isn’t always achievable with a private treaty sale.
You need to be realistic in terms of auction guide prices and sales prices. It is not guaranteed your property will sell via auction, and it might not always go over the guide price, so it can be a riskier route.
Estate agency fees are generally more when it comes to selling via auction – you’re looking at somewhere around 2.5%, so your fees will be higher!