Property auctions are becoming popular in United Kingdom and over the years, more and more people prefer auction real estate purchasing.
Here are three main auction popularity reasons:
First reason
After the auction gavel knocks three times, no more than in 28 days you will definitely become the owner of a new property. Once you hear desired knock a new owner and the seller share their contacts hence to complete real estate transaction. Whereas the standard real estate purchasing process last up to 6 months and there are no guarantees that the seller will change his mind.
Second reason
In most cases the prices on the auction is much lower due to the market value.
There are different reasons for certain houses to be on that auction more often it happens due to such facts as debt, divorce, inheritance. Various agencies, government offices, law firms own the majority of this real estate market and the only way to sell them is to place them at auction.
Sometimes owners would like to purchase their property faster and agree with the lower prices. Repair absence also influences the determination of prices this gives a new owners a great opportunity to realise a new comprehensive design.
Third reason
Most investors own real estate properties and sell it at auction.
This is a brilliant method for those buyers who desire to buy a ready-made business, like an apartment building with tenants. There is no need to wait for construction to be completed, to carry out repair or tenants search process. Your will immediately start receiving income.
14 steps through the property-purchasing auction
Have you ever thought of purchasing a property at the auction? Auctions – is a great opportunity to escape all long and tedious wait in limbo selling and buying process by making a quick deal. Here you can find fact list with recommendations to follow before buying a property off the market.
Before the auction
1. Find necessary information about properties and auctions at your desired location.
Select your perfect location and contact local property agencies. They will advise you regarding the upcoming auctions and will add you to the email newsletter list to send you relevant auction catalogs.
2. Examine the property and ask questions.
After you have selected two or three properties, contact the auction house to arrange the real estate examination. View the building and the house surroundings. You may use the expert versed in repair and construction in order to determine the workload and approximate price. Feel free to ask any questions to the auctioneer.
3. Auction document importance.
Auction documents may contain key information you are interested in, but you may need a separate set of legal documentation to complete the picture.
Legal documentation includes inspection reports, in case you have not seen them, ask your lawyer to conduct them before the auction. The list of legal documents may vary depending on the object. Ensure document verification for any hidden agreements or oversight that may later lead to unexpected expenses on your part.
4. React Quickly.
Purchasing property is a process where you do not need to take a decision in a hurry. Take time to make informed decision and bear in mind that all the auction process starts from the date of auction catalog publication that usually lasts about 4 weeks that is the reason why you should react quickly.
5. Stay informed.
You can ask your auctioneers to keep you up to date of any sale terms amendments (i.e. Annex). In addition, if you are ready to buy ask them to inform you about potential property sale before the auction. In such cases, it is a common practice.
6. State your budget.
Decide the maximum amount you are ready to spend on property purchasing. Albeit the houses cost at auctions is much lower than the market value the flats usually require essential repair works. If your current financial situation does not allow you to buy desired property before the main auction concern yourself on the topic of money existence. Find out the information on deposits prepare the necessary amount of money.
7. Small print information in terms and conditions check.
Do not forget to check all terms and conditions of the selected house. If you place a bet, you automatically agree and undertake to carry out with terms and conditions. Be sure to read the terms of sale, as well as what and when to pay, so that you do not expect unpleasant surprises later.
At the auction
8. Be punctual.
It is desirable to arrive sufficiently in advance of the official auction opening. All additional information or any property changes will be provided in the «Annex» or announced by the organizers before the auction starts. Check all the data, due to the fact that any changes may affect your decision.
9. Look into the conceptions of starting and reserve price.
You should keep in mind that a lot is offered at the tentative price that depends on reserve price. Starting price is the initial amount that is used to start the auction when the reserve price is the lowest cost that the seller agrees to. Remember the reserve price is not disclosed to the auction participants and may be at 10% higher than tentative price.
10. Firm and clear bets.
During the auction, try to offer your price clearly. Some of auction houses issue place cards to bidders so the auctioneer would not miss your bid. Auction is the place where you can be easily be distracted just pay attention to the whole process when you bid at the auction and offer amounts within your budget. The auctioneer must clearly state what the current bid is and who offered it but not by name.
11. If you cannot attend the auction find out a person who will be there on your behalf.
If for any reason, you are not able to attend the auction, the third party such as your agent or lawyer may place bets on your behalf. Some auctioneers also accept bids over the phone or through an intermediary. In that case, they need a written permission and a deposit receipt– the amount based on your maximum bid.
12. As soon as gavel taps you are bound to follow sales terms and conditions.
If your bid wins, you would need to sign the agreement and pay the deposit. After the third ta you are obligated to follow all sales terms and condition from that moment and you are responsible for property insurance. Rejection of purchasing leads to fine.
13. Prepare yourself to pay all amount of deposit and a total flat cost.
Most auction houses require 10% deposit on the day of auction, as well as identity cards. Right after that, the buyer has a right to take from 14 days to 6 weeks until full payment. Expenses incurred in payment will be indicated in terms of the sale.
14. In case the property is not sold you will be able to buy it in a private way.
In case the real estate was not sold, the auctioneer has the right to purchase the property immediately after the auction. Inform the auctioneer about your interest prior to the auction and do not leave the auction immediately following the end of the meeting.
