Buying property from auction is an exhilarating yet nerve-racking process. There are most definitely bargains to be had but preparation is key to making sure that what you get is what you hoped for!
To buy at an auction you need to first register, provide any documentation required and, in the case of online auction, register your deposit for the lot(s) you wish to bid on. Then with a typical auction contract, when the hammer falls (or the timer counts down to zero), if you are the successful bidder then you exchange with a 10% deposit, pay any additional “buyer’s premium” and/or auction fees and exchange contracts. At this point the clock starts ticking and with a standard auction contract you then have 20 working days until completion. If you are unable to complete by this time, there is usually a notice period of 10 working days during which you will likely pay interest and fees, but you have additional time to come up with the funds.
With any property purchase research is important but when buying at auction the more you put in before the sale starts will give you the best chance of avoiding nasty surprises if you’re successful. Ask a solicitor to review the legal pack, take a builder with you to viewings if you plan to carry out works on the property. Equally importantly if you require finance, call or email us so we can appraise the property for you and suggest a tailored approach to give you the most competitive and straight-forward mortgage or loan within the timescales available.
Your Guide to Property Auction Terminology
When it comes to buying or selling property at auction, it is so important to understand the proceedings.
In order to do this, being able to comprehend the common terminology often used is key, but it can all seem very confusing & daunting.
So, we have listed the common terminology & phrases that you are likely to hear when buying and selling at an auction, to help make the process smooth sailing.
A Guide Price – this is a figure used to convey how much a property is likely to sell for to potential buyers.
A Reserve Price – a reserve price is a conditional price set between the seller and the auctioneer.
The Open Market Value – the open market value of a property is an estimation made by the valuer of the expected price that a property would sell for in an open fair sale environment.
A Sales Commission – this is charged to the seller when the auctioneer successfully sells their property.
An Addendum – this is a list of changes to any details of a property that are announced after the catalogue has been published – make sure you check this before an auction!
What type of lots go to property auctions?
Every year, thousands of properties are marketed for sale via auction for various different reasons.
Approximately 50% of the lots that go to auction are houses & flats, most of which are in need of complete renovation or modernisation.
25% are residential investment properties, and the balance is commercial lots. Included in this mix may be other more interesting properties, such as churches & pubs.
Why Aspire Property Finance?
Aspire Property Finance Specialise in Auction Finance. Our knowledge and over 15 years of experience will help you confidently purchase property or land at auction. Whether a long-term residential, buy-to-let or commercial mortgage, or short-term bridging finance, Aspire Property Finance can source products to meet the demands of an auction purchase, achieving completion within auction timescales.
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Aspire Property Finance are funding specialists and can source mortgages to suit your needs, whether you are a first time Landlord or Developer, or hold a multi-property portfolio within the timeframes provided by auctions.