The Ins & Outs Of Buying Property At Auction (& Why You Should Consider It)

When you think of buying a new home, what springs to mind? Normally, it’s trawling through property advert after property advert looking for the perfect places to see, before spending what seems like hours at each one looking around and asking numerous questions. It’s tiresome but necessary. What you probably don’t think of is heading to an auction house, bidding on a property and owning it instantly, should your bid win. And yet, this is one way to get your hands on a new home quickly. The fact is that auction buying is a great way to avoid lengthy purchasing processes. You can go along to an auction with a ten percent deposit in your pocket, bid on a property, and it is yours, should you outbid everyone else, that is. Of course, the process can be a somewhat confusing, and sometimes risky, one. Bearing that in mind, before you decide to buy a property at auction, it’s worth learning the ins and outs of the process as well as the pros and cons. 

What are the benefits of buying at auction?
One of the major benefits of buying property at auction has already been mentioned above - a speedy sale and purchase process. You could attend an auction without a property and leave with the keys to one. As soon as the hammer hits the table the sale is agreed, and there is no going back, so there is no risk of the sale falling through. Then there is the fact that auctions are great for finding properties that are a little different to the norm. So if you have an eye for unique things, buying a property at auction could be something that is worth considering. After all, you never know what gems you will come across. 

What are the downsides? 
If you end up in a bidding war over a property and you lose, you could lose the money that you have already invested in the property, such as through surveys and other research. This can be a total nightmare, but if you are going to buy property at auction, it is a risk that you have to be willing to take. The other downside to buying a property at auction is that once you have won the bidding process, the property is yours and you have no choice but to pay for it. So it is vital to ensure beforehand that you have the ability to buy the property. You may have savings to use, or you may want to look into financing options, such as auction finance, for instance. To learn more about how this works, resources like articles such as ‘How Does Auction Finance Work’, can be useful. The more research you can do on the financial side of things, the better. 

How should you prepare? 
The main way to prepare for the auction is to do your research. The more research you are able to do, the better. The first step to doing this is to sign up to the mailing lists of all local auction houses so that you are made aware of any suitable properties. Any properties that you like the look of, do more research into. Go and visit them, have a look around, and consider having a survey done on your favourite one. Remember, keep an open mind; often auction properties are in a bad condition. However, that means that you can get some amazing deals. Look into what each property is worth so that when it comes to bidding, you don’t end up paying over the odds for the property. Get your finances in order. Ensure that before the auction takes place, you have all of your finances in order, including having the means to pay a deposit on the day and the rest of the money in the weeks after the auction.

If you're looking to build your portfolio and aren't starting with a lot of money, buying at auction is a good way to go. Over time, you could build up your own little empire. If you choose to rent them out, you could always hire an agency to manage your property leaving you to get on with the next renovation!

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