MoneyMagpie

Jul 15

9-step guide to buying at a house auction

House auctions can be a great place to pick up a bargain but you need to know what you’re doing. Cheap houses aren’t so easy to come by at auction unless you’re good at building. You also need to be very careful if you’re buying a house at auction, which is why you should read our essential guide before doing anything else.

Going to a house auction can be really exciting but scary too. It’s a lot of money to part with in such a high-emotion situation so you need to be very careful, particularly if you haven’t done it before. Here’s our nine-step guide to getting a house at auction.

9-Step guide to getting a house at auction

Step one:house auction

This is really important! Attend a few auctions as an onlooker first. That way you’ll get a feel for what goes on and you’ll be much less apprehensive when the time comes to bid for real. You’ll know what to expect and you won’t be phased so much by the speed of bidding.

Step two:

Find out about future auctions in your area as far in advance as possible. Property auctions have exploded in popularity over the last few years, and now it’s much easier to find your nearest property auction than it was a few years ago. Property Auction Action list all property auctions nationwide by auction house, area and date. You’ll have to contact the auction houses individually to get catalogues, but it’s a good starting point. A different method would be to browse through properties up for auction on sites like Rightmove and Zoopla. Once you’ve found a suitable property, you can then find where it’s on auction and head down there!

Step three:

Be a step ahead! Make sure you get hold of the auction catalogue as soon as it’s printed, usually about four weeks prior to the auction. That way you’ll have plenty of time to carry out all the necessary preparations.

Step four:
Once you’ve picked out a property that interests you, get in touch with the auction house selling it to arrange a viewing. Whilst looking around, find out the opinions of local residents and estate agents. Those who are the best informed generally do better at auctions, so make sure you’re up-to-date on the average house price in the area, what a similar site sold for recently and so on.

Step five:

After the initial viewing, if you’re still interested, make sure you organise the conveyance and get legal advice from your solicitor. You’ll require a legal pack from the auction house, for which there will be a charge. This is at the auction house’s discretion; usually it’s around £10–15. However the Essential Information Group sometimes has these available to subscribers online if the auction house has agreed.

Step six:

Make sure you have a survey of the property. Mary Sanderman of the Essential Information Group recommends getting a full survey done; it might cost you a bit more, she says, but otherwise you just don’t know what you’re getting. If you have a better idea of how much work needs doing you won’t get any nasty surprises, you’ll be able to make a more informed offer and won’t pay over the odds for your property.

Jasmine says...

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It’s essential to pay for a full survey if you’re interested in an auction property. It costs but it will save you SO much money in the long-run

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Step seven:

Once you’ve decided on your price, you’ll need to allow some time to arrange a firm offer of a mortgage with a lender. Explain to them that you plan to buy at auction.

Step eight:

On the day of the auction, call ahead to make sure there haven’t been any last-minute changes to your lot. This is known as the addendum, a sheet listing any changes to the entries in the original catalogue. This is really important so remember to check it thoroughly before you bid; it’s very common for most of the entries to have had at least some adjustment.

Step nine:

Set yourself a price limit on the property before the auction and stick to it. NEVER get carried away, because successful bidders are legally bound to buy.

Top tips for buying a home at auction

  1. If you’re confused by auction jargon, check out the useful BBC Homes glossary to help you make sense of it all.
  2. Don’t take your solicitor to the auction – you’ll just be paying unnecessary money for their time; you can bid yourself!
  3. However, if you’re really nervous about bidding you can opt to bid over the phone – just call the auction house beforehand to make arrangements for this. You can also get someone at the auction house to bid for you. As long as you provide your fixed maximum offer, this is easy to arrange.
  4. Having had our first experience of a housing auction in an effort to provide you with the best information, we can tell you that it’s quite nerve racking! It’s definitely worth attending as many auctions as you can beforehand; you can pick up tips on smart bidding quite quickly and feel much more comfortable.
  5. Make sure you arrive early so you’ve time to ask any questions you want to, and to get more settled. At the auction we went to, the auctioneer did run through the procedures at the beginning for first timers which was very reassuring.

 

How much do you save at a house auction?

Though there are no official figures, experts say buyers save around 30% on average at auction. At an auction we visited, a four-bedroom semi-detached house in Surrey sold for four times less what it would usually go for!

However, it does depend on where you want to buy. Prices at London auctions have recently gone up and it’s likely that you could end up paying a normal market rate for properties in central London particularly.

Try an online house auction

Property site Zoopla became the first place to launch an online property auction in 2010, a move they felt would soon become the future for property auctions. We can’t find anything on the website to suggest they’ve continued with their online auctions, but they certainly started a trend which has been followed by other sites.house auction

At Auction Move you simply need to register, which includes an identity check to make sure you are who you say you are, and then you’ll be able to bid for your dream house online. Our advice above still applies, and make sure you don’t get too over-confident – we all know how easy it is to make impulse buys with the click of a button, though most of the time they don’t end up costing us thousands!

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