Buying Property At Auction
Buying property at auction can be a great place to pick up a 'bargain', whether you are looking for a home or an investment.
As well as being a quick and relatively hassle free way to buy a home, no driving around viewing endless houses, no negotiations, and no last minute fall through if the house sellers get a better offer, the auction process is easy. You simply look through the auction catalogue, find a property you like, arrange a viewing and do some research, and show up prepared on auction day.
However, buying property at auction does require careful planning. Thousands of properties are sold at auction in the UK every year – and many are BMV (below market value), meaning there are plenty of bargains to be snapped up. So, remember to do your homework carefully - unlike buying through an estate agent, you cannot change your mind if you later discover something bad about the property. It is your job to find out everything that you can before the auction begins.
It's important to view a property prior to bidding at auction, and with that in mind our viewing checklist can help you to remember all the relevant questions that you will need to ask.
In essence, there are three steps to successfully buying property at auction, which are:
Preparation: The research you should do, and arrangements to make before you go
Know-how: Making sure you understand how auctions work
Auction day: What to do when you get there
Additional fees to be paid by the buyer
The catalogue is usually printed ahead of the legal pack and we advise to confirm any additional fees outlined in the Special Conditions of sale with the Auctioneer.
We strongly advise checking for –
Auctioneer's administration fee – The amount is usually a set sum +VAT and is payable in all instances, whether buying before, at or after the auction.
Local Authority fees – it is common practice for Council clients to make an additional % charge to cover their legal, surveyors and selling fees. Amounts do vary.
Search Fees – some solicitors will reclaim the cost of carrying out searches from the buyer
VAT – Some commercial properties will be subject to Value Added Tax at 20%
Stamp Duty – This will vary, not only with the amount paid for the property but with the circumstances of the buyer and the property’s intended use.
Rent arrears – in the case of investment properties, the buyer may be responsible for the payment of any outstanding rent.
Contributions to the seller's legal and/or auctioneer's costs.
Buying property at auction - what types of property are for sale?
Auction houses often focus their attentions on unusual, hard-to-value premises such as churches and village halls. You’ll also find pockets of land, repossessions, properties, properties in need of renovation and commercial lots with potential for change to residential use.
However, there has been an upsurge in residential properties that don’t necessarily require renovation or development, as vendors turn to auctions to achieve a faster and more efficient sale of their home. That means an auction could be a great place for first time buyers to snap up a bargain.
The main advantage of buying property at auction property is that they usually ensure a quick and efficient sale. Completion is normally within 28 days, or 20 working days. For this reason, auctions are a preferred method of sale for repossessions, properties proving difficult to sell, properties that have been on the market for a long time (through an estate agent) and properties with development potential.
Local authorities, mortgage lenders and housing associations may also have a considerable number of properties they need to sell quickly. It can be financially beneficial for them to request a property appraisal and if the price is right sell at auction, recovering their money without the drawn out processes and higher costs of going through an estate agent.
Interest in property development and investment has increased quite significantly over the past couple of years and the number of people using auctions to buy property has subsequently risen. Such competition inevitably means auction sales can often achieve higher prices than private sales.
A lot of information about auction properties is available from the auctioneer’s catalogue, which is normally available 2-3 weeks before the auction. It is worth considering more than one property at the same auction because at this stage you cannot determine whether you will be the successful bidder. Guide prices may change right up until the day of sale, properties can be sold before the auction or they can be withdrawn. Make sure that you get a copy of the auction catalogue as soon as possible and register your interest in the property with the auctioneer as soon as possible (there is usually a form to complete) to ensure that you are kept up to date with any developments.
Property auction locations
As a member of UK Auction List, buying property at auction is made easy, as you will have access to details of forthcoming land, development site, residential and commercial property auctions taking place throughout the UK. The properties we exhibit in our database are supplied directly by UK auction houses, and this allows us to offer house hunters and property investors a comprehensive list of current properties for auction throughout the whole of the UK. It is worth noting that some of the smaller auction houses do not advertise on the major "free" property portals, as it costs them money - all these auctioneers’ catalogues we list for free on our website, which offers our visitors a wider selection of property for auction.
The auction house contact information, for every property in our database, can be found within our members' area so that you can visit the auctioneer's website or contact them directly for further details on any property that piques your interest. They should be able to provide you with everything you need to know about their upcoming auction.