Buying a property at auction is one way to secure a home without going through the conventional buying process, and is also a good way to pick up a bargain. However, there can be some drawbacks, which makes it important to understand what you should be looking for before setting foot inside an auction house. Once the gavel has fallen, you are tied into the purchase.
Sign up to the mailing list at auction houses dealing in your desired area, so that you receive news of the latest properties up for auction. Before you bid on a property, attend a few auctions and just get a feel for the process.
Once you see a property or properties which you think you may be interested in, contact the auctioneer to arrange viewings. Once the catalogue has been issued, there will usually be around one month before the auction takes place, which gives you the opportunity to view the property.
Sort out an Agreement In Principal for your mortgage, so that you have an idea of your finances and what you may be able to borrow. The mortgage process can be complicated when buying at auction, as 10% is payable as soon as you bid successfully on a property. The remainder will be payable 28 days after, which means you may require a bridging loan if your mortgage application isn’t completed.
A mortgage adviser takes a CeMAP course so that they have the desired knowledge of bridging loans and other sources of finance, and will be able to help guide you through the process.
