Property auctions are becoming more popular and are a method of buying and selling residential property, commercial property, and land investments opportunities through a competitive bidding process. Auctions are a way to avoid lengthy and uncertain buying procedures but as soon as the hammer falls on a final bid you are committed to buying and paying for the property/investment. Auction property sales are agreed upon as soon as the hammer falls and there is no risk to either party - it is a legally binding contract.
Researching the property before the Auction
Auctions are exciting and are not just for the professional buyers with insider knowledge of properties coming up for auction, they are for anyone! With the increase in popularity as many buyers and sellers are now wanting to avoid lengthy processes of buying and selling. Auctions are quick and fast and have a shorter turnaround on completion of the sales process and there is no risk of anything falling through at the very last minute.
Researching before bidding and committing is important and this all needs to be completed before the auction date. With the structure of auctions, you are not able to bid and then back out if you win, once you find out the property is not in a good state of repair for example.
Our tips would be:
- Keep a very open mind when looking at auction property, they are not always perfect and can be very run down and in a bad state of repair. But you may also find a perfect opportunity but this can also attract a number of bidders.
- Take a look at all the pictures online and get an idea of the property.
- View the 360 virtual tours if available on the property details.
- Speak to the auction department within the estate agents to get a better idea and feel for the property.
- See if you are able to arrange a physical viewing, take your builder or architect with you so they can take a look too. They could help you make a decision if the property is right for you.
- If you are new to auctions see if you are able to find any locally and watch them. Take a look at Google and search for ‘local property auctions’.
Auction property will come with a legal pack and cannot be put in an auction until it is received. Within the pack, it will have the title plan deeds, local authority and environmental searches, fixture and fittings list, and sellers’ information form plus any leasehold information. If there is time and you have access to a solicitor ask them to look over the documents to see if everything is in order and there are no hidden covenants.
Costs
There are a number of costs involved which you will need to be aware of before committing to a property auction. So you are aware there will be:
- Administration fees will be charged if you are a buyer of an auction property.
- Solicitor or Conveyancer fees will be applicable to complete the purchase.
- Stamp duty may be applicable depending on the cost of the property.
- Once contracts have been signed you will then be responsible for the property and you will be required to insure it.
If finance is required this will need to be in place at the time of the auction start date. Mortgage in principle will need to be agreed upon.
As the hammer falls a 10% deposit will be required and the remaining balance will usually be within 28 days.
Find out more about Meller Braggins property auctions
If you want to find out more information about the Meller Braggins auction calendar do get in touch today and we can update you of dates we have available. Thinking of putting your property into an auction or you have a portfolio that you are looking to downsize, we can help. Book your auction appraisal today.