Buying a house at auction is a high stakes game when you consider that when the hammer falls you are legally bound to buy.
Equally it’s thrilling to experience the highs and lows of an auction room – and to come away with the property you wanted – for a good price.
Buying a home, or buy-to-let investment, is an expensive business and it pays to do as much research as possible before you consider entering an auction room.
Finding an auction
Identifying auctioneers that are active in your area can be done by asking local agents or just keeping an eye on local papers.
The majority of auctioneers place their stock on Rightmove and Zoopla too. You can also register with the Essential Information Group (EIG) that will alert you to properties going to auction within the specifications you register – including postcode and price.
Properties will be advertised in an auction catalogue weeks in advance of the auction date and you'll be able to view those on offer before the day.
Finding a property
Virtually every lot will be offered with a guide price, which is only meant as an indication as to where the reserve is currently set.
Once you have identified one or more that you might be interested in, within your price range, then go and view them.
Take someone with you who can spot work that needs to be done. Many auctioned properties are in a poor state for a number of reasons.
Repossessions might be run down as the previous owners didn’t have the money to maintain it well and some have been empty for a long time, perhaps through probate. Others may be in pristine condition and the owners simply want a quick sale.
David Sandeman at EIG says: “Look round with the necessary tools to ascertain the property’s condition. This might be a ladder, torch and a camera to allow you to refresh your memory when working out later what needs to be done.
“At the same time you might want to get your friendly builder or surveyor to give it a cursory inspection to bring to your attention any issues you might have missed.”
Read our eight property viewing tips.
Timing is everything with an auction. If you intend to buy, get your finances sorted. Make sure you have readily available cash for a quick purchase. Auctions require a 10% deposit on the day and you are legally bound to buy the property. You'll usually have to pay and complete within 28 days. If you back out, you lose the deposit.
On the day
Before you head off to the auction house, call it up to make sure the property you are interested in is still available and hasn’t been withdrawn. You should also make sure you take your deposit with you and two forms of identification.
If you are a successful bidder, you will be whisked off by someone to pay your deposit then and there. They usually take debit cards and cheques – but check with the individual organisers.
Where a property doesn’t reach the reserve price, the auctioneer will withdraw it then and there. Don’t despair if your budget doesn’t reach the property you want and it doesn’t sell. The sellers might still be interested in negotiations so ask the auctioneer and try to strike a deal.
Remember, don’t get carried away with your bids – set a limit and stick to it.