HOW TO BUY AT AUCTION
Buying tips: Local auction houses will offer advice. Buying at auction is the same in legal terms as buying through private treaty, but the process is different. The first step is to obtain a catalogue, available four weeks before auction. You can request a property’s legal information pack, which contains searches, but not a valuation or survey. It is wise to have a survey.
You must have all finances ready on the day of auction and pay a 10 per cent deposit immediately, followed by the balance 20-28 days later. Once the hammer falls, you are legally obliged to complete the sale. and money was flowing, you discounted auction property by 20 per cent. Now it’s 30 to 40 per cent less and sometimes even 50 per cent if it is in a difficult area,” says Tony.
“You are asking buyers to commit in a very short time scale, usually four weeks from the catalogue being out to the actual sale. There has to be an incentive.”
The make-up of the sales rooms has changed since the credit crunch. Andrew Winter, head of Blundells Auction House in Sheffield, says that although most buyers tend to be experienced investors, he is starting to see more of the “one-off” bidder and first-time buyers, who are being funded by the bank of mum and dad.
Tony Webber adds: “It has changed in the last three or four years now the banks are not lending freely.
“Property investors who can’t get mortgages from the banks are using their own money to buy and they are looking at one-bedroom properties to let because there seems to be a big rental demand for those. ”
Tony agrees that now is a good time to buy if you have the cash.
“When banks start lending again there will then be a big demand to buy from all those first-time buyers who can’t get on the property ladder at the moment.”