Buying houses at auction can be fantastic, helping you get properties cheaper than you would otherwise and also more quickly. However, you must know what you’re doing in order to invest successfully. We’re here with a full guide, from initially finding the properties through to the auction day, to help you gain an understanding of how the process works. We’d also recommend chatting with someone who regularly buys properties at auction to help you find out about the intricacies on a personal level!
Identify Potential Properties
The first thing you need to do is identify the potential properties. If you have an auction in mind that you want to attend, then the website will have all of the properties listed, so you can have a good look through them. Otherwise, you can look on most house sale websites and then filter the properties down into those that are being sold at auction, and then it should provide information about which auction the property is being sold at. You’ll have an idea of the kind of property you’re looking for and also the price point, so you can make a shortlist of the ones you’re interested in and then follow the next step.
View The Property and Take An Expert With You
It’s absolutely essential that you view the property that you’re interested in buying at auction, as well as take an expert with you (usually a builder or surveyor). You can find out more about the property, look at its potential, structure and condition, and when you take an expert with you, they will be able to highlight any red flags that may deter you from purchasing the property if you know that it will be more hassle than it’s worth. For example, if there is a conservatory but it feels really cold, you’d need to consider things like conservatory roof insulation or potentially new double glazing. Take a property buying checklist with you to ensure you cover all bases and then make sure you do this with all of the properties you’re looking at so you can make accurate comparisons.
Evaluate The Local Market
Another important component when buying at an auction is to evaluate the local market, especially if you’re not from the area. You first need to know what a fair price would be based on the area, but you also want to see how the value of other properties has changed over time to see whether this area and the work you want to do on the property will align with your profitability goals for the project. Knowing what is in the area and the amenities will also help you gauge the profitability and potential, depending on whether you’re looking at a shorter-term or longer-term investment.
Get Your Finances Together
Once you’ve got a property lined up that you’re interested in purchasing, you need to get your finances together. For people buying with a mortgage, you’ll need to arrange a mortgage in principle with your bank. If you’re a cash buyer, things are a bit easier. It’s also vital that you go into the auction with an absolute ceiling figure and stay really strict with it because it can be so tempting to get caught up in the atmosphere, so you need to be strict with this. You should also keep looking at the property in the run-up to the auction, as the guide price may change. However, it’s key to remember that this is just a guide, so expect it to go for lower or higher on the day.
Attend Property Auctions Before You Take Part
If you’ve not been to a property auction before, then it’s so important that you attend one when you’re not taking part. It’s a really unique atmosphere and something that can take adjusting to, so attending one just to see how everything works will help you feel more comfortable on the day and put any nerves at ease. It would also be worth reading a guide on the language used at property auctions if you are very new to it all. Then you can pick up where and when it’s used throughout the auction.
Final Thoughts
There are plenty of benefits to buying a property at auction, from the speed to no fixed asking price, and no chains, so it’s a valuable skill to be able to identify good properties and buy them at auction. However, it’s really important that you know what you’re doing to make the process as successful as possible. Liking the look of a property and bidding at auction simply won’t cut it in terms of good investments, so take the time to follow the steps above and it’ll really help you to make your investment a success.