Are you interested in a few top auction property tips? Well read on.
Auction Property Tips Number 1
Visit the property before hand, and try and get as much details on the property as possible. If you are convinced that it is a good buy, consider calling in a surveyor. Obviously there is a cost implication with a surveyor, but the cost might be a lot higher if you buy a property that has major unseen problems that a surveyor might have been able to pick up.
Keep in mind that even if you do call in a surveyor there is still know guarantee that you will be successful when you bid on the auction property, so you might have lost what ever money you spent on the surveyor in the first place. This is your call. But, rest assured as you get more confident at buying property you will begin to be able to make reasonably safe, educated judgments yourself as to whether a property has any major faults. Then you can confidently go to auction and bid and if you are successful then call in the surveyor.
Auction Property Tips Number 2
Contact the Auction house prior to the auction to see if you can view the legal pack on the property. This way you will know if there is any legality problems way before the auction. The last thing you want is to think you have bought a bargain auction property in perfect condition at auction with a huge garden, only to find out that there is a dispute with the neighbour who says that half the garden should actually be theirs.
Auction Property Tips Number 3
Don’t rule out the opportunity to buy the property before the auction. If you really like a property, there is nothing stopping you from attempting to make a purchase before hand. Many auction properties will not be able to be bought in this way. Repossessed property are a prime example, legally lenders who put a repossessed property up for auction do so because they have to be seen to be selling the property in an open and fair way.
However, there are also many auction properties that never get to auction because an offer has been accepted by the vendor prior to auction.
Auction Property Tips Number 4
Watch out for “off the wall bids” by the auctioneer. Off the wall bids, are false bids. This is when an auctioneer takes imaginary bids or bids from someone he is working with in the audience. This is legal as long as the imaginary bids do not exceed the properties reserve price.
One thing to look out for is that after the reserve has been hit many good auctioneers will let the seasoned professionals in the room know by saying things such as “It’s here to be sold” or “It’s now in the room” or if it is getting close to the reserve price but not quite there they may say something like, “come on, we are almost there” or “just a little more.”
Auction Property Tips Number 5
This is a big one! Make Sure You have your finances sorted out before you get to auction. There has been many a horror story of people buying auction property putting down the 10% deposit then not being able to come up with the rest. The attitude of the vendor to this is likely to be, that it is not their problem and you will either have forfeited your deposit in full or they will charge you for the extra time it takes to sort out the finances. Please, for your own sake, do not make this mistake.
Imagine putting down a £17,000 deposit on a £170,000 auction property, then not being able to come up with the rest of the money. That sort of loss would totally financially wipe out a large percentage of people. People have had to declare themselves bankrupt over lesser figures.
Auction Property Tips Number 6
Follow up on any unsold properties that you had an interest in. Be sure to do this as soon as possible after the lot goes unsold. The property might have missed its reserve price by only a few hundred or a few thousand pounds. The vendor will probably be at the auction and if you make him an offer either directly or through the auction house, straight after the lot goes unsold, you could still pick up a bargain.
Remember that the vendor wants to sell the property. they have come to auction to see it sold so if you catch them at the point when they are feeling dejected and like they are going to have to wait until the next auction comes around to sell it, you might be able to negotiate a good deal.
Auction Property Tips Number 7
Yes, I know you have probably heard this before – But, set yourself and limit and don’t go over it. It’s a total waste of your time and does a lot more harm than good to win the bidding on an over priced property. If this is your dream home and you are going to be living there yourself for the next 20 years, then fair enough. Otherwise paying over the odds will lose you money, hair and a lot of sleep. You get the idea! Stay within your budget. (Trust us, We know a lot about hair loss!)
There will be another auction property that comes your way in the future. Remember the rule: It is better to hold unto your capital than to lose it. If the figures aren’t adding up, rather than wiping yourself out with a really bad decision hold unto your deposit and live to fight and buy another day.
Have a good look around the rest of my blog for more helpful tips on many aspects of investing in property.**Nothing on this website should be confused with financial or legal advice. If you need this, or any other type of advice, please seek the help of a competent professional. In addition, because real estate laws change all the time and differ from state to state, and even city to city in the same state, everything in these pages should be considered general marketing advice and ideas. Please see link to full Disclaimer at the bottom of this page.