Bring the ham­mer down on a new home

Buy­ing at auction can be risky, but can also be a great way to bag a bar­gain ren­o­va­tion project

Rutherglen Reformer - - House & Home - Ju­lia Gray

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The first step is to find auction houses that sell prop­er­ties in the area you’re look­ing. Lon­don auc­tions have prop­er­ties in Lon­don and the Home Coun­ties, but of­ten also much fur­ther afield.

Out­side Lon­don, auction houses are more likely to spe­cialise in lo­cal prop­er­ties. Once you’ve found an auction house, get on its mail­ing list for auction cat­a­logues. The cat­a­logue should be avail­able a few weeks be­fore the auction, and will have view­ing times, guide prices and con­di­tions of sale.

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Le­gal doc­u­ments for each lot should be avail­able to down­load from the auction house’s web­site. Read them care­fully and send them to your solic­i­tor, as they could af­fect how high you bid and if you bid at all.

Searches are of­ten in­cluded in the le­gal doc­u­ments, but if they’re not, ask your solic­i­tor to do them be­fore the auction, although this could, of course, be a waste of money.

The same ap­plies to a sur­vey – if you don’t want to pay for one on a property you may not buy, ask a good builder to view the property with you.

Houses and flats be­ing sold at auction of­ten re­quire mod­erni­sa­tion, and not be­ing aware of the full ex­tent of the work re­quired could prove very costly.

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Re­search the lo­cal hous­ing mar­ket be­fore the auction so you know how much the property is worth, and de­cide on your max­i­mum bid ac­cord­ingly. The temp­ta­tion at auc­tions is to get car­ried away and bid higher than your max­i­mum.

If you’re wor­ried about this, get some­one to bid for you, or bid by proxy, where you au­tho­rise the auction house to bid on your be­half up to a spec­i­fied limit.

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Be­fore the auction, check what ID you need to reg­is­ter to bid and what meth­ods of pay­ment are ac­cepted for the de­posit. If you’re suc­cess­ful, you’ll have to ex­change con­tracts and pay a de­posit (usu­ally 10% of the pur­chase price) and a fee to the auction house im­me­di­ately.

The com­ple­tion date is of­ten four weeks from the date of the auction, but it can vary. If you fail to com­plete on that date, you could lose your de­posit and even be sued by the seller. For this rea­son, pay­ing cash is a much safer way to buy property at auction than with a mort­gage.

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The guide price is the price the auction house ex­pects the property to sell for, but prop­er­ties of­ten fetch con­sid­er­ably more.

Lots will usu­ally have a re­serve price and only the auction house knows what it is. If the bid­ding doesn’t reach the re­serve, it may be pos­si­ble to do a deal with the seller, via the auction house, on the day.

You can check online af­ter the auction to see which prop­er­ties didn’t sell, and the site will usu­ally in­di­cate the price they would be avail­able for.

You may also be able to buy a property be­fore the auction, but many sell­ers will refuse be­cause they know prices can leap up in the heat of the mo­ment.

If you’re care­ful and do your re­search, you can pick up some fan­tas­tic homes through a property auction – and save your­self money

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