How to buy a house Buying a property at auction
Buying at a property auction is a much more transparent way to buy a home. You’ll see other bids as they’re made, rather than having to take an estate agent’s word for it.
Be warned though, as it does have its pitfalls, such as disappointment if you’re outbid or having to hand over your 10% deposit to the auctioneer straight away if you lodge a winning bid, as contracts are signed on the day of the auction.
You will also need to be able to access the remaining 90% of the purchase price within 28 days. If you can't complete within this time you will lose your 10% deposit so, if you need a mortgage, make sure you get one agreed in principal with your mortgage lender before the auction.
If you are looking for advice, the Which? Group offers an independent mortgage advice service that looks at every mortgage from every available lender. You can also find an independent mortgage adviser using Unbiased.co.uk.
Go to property auctions for a quick completion or a possible bargain but don’t bid until you’ve had the property surveyed and the legal pack checked by an independent solicitor.
Before you buy at a property auction
Do your research
Use websites such as Property Auctions to gather details of forthcoming auctions in your area.
Make legal checks
Request a brochure and study the particulars carefully, reading all the small print. Then send it to your solicitor or conveyancer and arrange for them to carry out the usual searches, enquiries and title checks.
Sometimes the seller’s solicitor will carry out the searches and send a copy to your solicitor.
Arrange a property survey
Arrange to have a house survey and a valuation done and to get the results before the auction.
View the property
View the home in the normal way, preferably more than once, and be sure it is what you want.
Set a price limit before you bid
Fix your price limit and complete arrangements for finance before the day of the property auction. A mortgage lender will have to inspect and value the property in the usual way before they make you a mortgage offer.
Don’t get carried away during the bidding. Don’t exceed your price limit. You could appoint someone else to bid for you to ensure this doesn’t happen.
Remember, if you’re outbid, you lose not only the house but the expenses of a survey and solicitor.
For more property advice, see our book Buy, Sell & Move House which contains everything you need to know to navigate the property maze.