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How to Buy Houses at Property Auctions

It's very difficult to get a genuine bargain in property these days, unless you are in a position to make a cash purchase for a reduced price, or are lucky enough to sign up for a new build that has increased in value by the time it's been completed.

Author: Paul Green

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Most of us aren't able to do that. However it is still possible to get a great deal by considering properties for sale at property auctions.

Not only can you find a deal, but you can also skip the months of waiting for a property sale to go through. Sales at auction happen in minutes and you know if you've won the home as you walk out of the auction house.

But auctions can be incredibly intimidating events. You think watching Bargain Hunt on TV is scary - image spending hundreds of thousands at property auctions!

Here are some essential dos and don'ts.

First off, find out where and when the property auctions are in your area. Search the internet or look in your local newspaper. Most venues have regular events throughout the year, and will produce advance catalogues weeks before the sales. Get yourself on the catalogue mailing lists.

At this stage, it would be worth you attending one or two of the sales just to see what happens. Because you will be spending a lot of money and they can be intimidating events, it's very much worth becoming familiar with the format.

Spend plenty of time in the auction room. Observe the auctioneer carefully, especially the way they work the bidders. Remember it's their job to get as much for the property as they can, so watch how they play bidders off against each other. This knowledge will help you when you come to buy.

But whatever you do, don't be tempted to bid at this stage. You are here to learn, and there is much preparation to do before you starting bidding at property auctions. Keep your hands in your pocket!

As the catalogues start to arrive, go through them carefully and pick out properties that look interesting.

Many homes offer pre-auction viewing - take advantage of this. And do your own research of the property. Ask neighbours about its history and why it's for sale at auction and not through an estate or property agent.

You can check prices in the area with reputable property agents. Some may even have a little insider knowledge about the property… a good estate agent keeps their ear to the ground and knows the gossip!

Still interested? Carry out the usual property and land searches. Check the catalogue description is accurate and carefully read the terms & conditions of sale. And decide on the most you're willing to pay.

Don't be tempted to skip any of these checks, especially if you are buying an investment property. It's easy to disregard them because you won't be personally living there, but a bad property will be a huge financial drain on you.

So, you're ready to buy… but before you start heading off to property auctions, you need to get your finances in order. If you are successful you'll be expected to pay a 10 per cent deposit on the day, and the remaining 90 per cent within 28 days. Get the cash ready and have a mortgage agreed first; you could lose your deposit if the mortgage is delayed.

On the day itself remember to take two forms of ID and all your bank details. Arrive early and check for any changes to the published catalogue. Find a seat where the auctioneer can clearly see you and get ready: the fun's about to start!

When your intended purchase comes round, make your bids clear to the auctioneer. Raise your hand or nod your head… shake it when you've reached your limit to show you are out of bidding.

Don't worry if the price doesn't reach the reserve. Sometimes homes are sold to the highest bidder anyway, so ensure you leave your details with the auction house.

And if you do win the property, it becomes your legal risk the second the hammer falls. So you'll need to sort out insurance straight away.

Remember that buying from property auctions carries the same commitment as buying property the normal way. If your hand goes up and you bid for a property, make sure you fully understand the implications first.

Good luck!

For further information please visit our website at http://www.propertytoday.co.uk or ring us on 01733 427177.

About Author

Property Today helps you at every stage of the home buying process. From casually browsing house prices, to finding your dream home and even appointing an estate agent, solicitor and financial adviser.

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How to Buy Houses at Property Auctions