Buying a house at london property auctions is getting increasingly popular, as increasing numbers of buyers realise the serious bargains. Auctions are proving to be a good way to pick up unique properties and a good place to start if you’re looking for a project or want a home with a difference.
Another good reason to consider buying a property from london property auctions is that you can avoid being ‘gazumped’ because when the hammer falls, the deal is done. Gazumped is when another buyer swoops in with a slightly higher price than yours, and despite the seller accepting, they decide to sell to the higher offer, regardless of how much the proceedings have cost you so far.
It is worth noting that those looking to buy in London will generally find few good properties at auction because of great demand for the capital’s properties. If you are heading to an auction, you should be ready with top tips from the National Association of Valuers and Auctioneers (NAVA) and the National Association of Estate Agents (NAEA).
Research property and legal pack: When buying at auction it is vital that you research the property beforehand. Ensure you check the details of the property in the auction catalogue and the legal pack. If you are serious in purchasing the property, it’s always a good idea to ask your solicitor to also go through the pack.
Visit the property: See for yourself what the property actually looks like from inside as well as outside. Some properties will require more work than others so it is important you are confident in the condition of the property before you bid. If you have any doubts after you have done your research and visited the property, it would be better not to bid.
Ask the estate agents: Ask estate agents in the area what other properties there have fetched to have an idea of property costs in the area.
Have the necessary finance ready: Having a mortgage in principle before bidding at auction is very important. If successful, you will be required to deposit 10% immediately and the balance within 28 days. You should make sure with your lender that they can provide the funds in the allotted time. If you don’t complete, your deposit will be forfeited.
Don’t forget the costs: Make sure you have enough to cover the extra costs involved in buying a property. Consider stamp duty, legal fees and surveyors’ costs. Some auctioneers also charge a ‘buyer’s fee’ which is around 1.5% of the sale price plus the listing admin fee.
Make an offer: If you really like the property, make an offer. Some vendors are open to this prior to auction day so it is always worth making an offer. Buyers must remember that if the offer is accepted they will still need to proceed on auction terms. It is not a case that will proceed as a traditional sale if the offer is accepted before auction day.
Arrange a survey: Surveyors are trained professionals who will pick up on damage which buyers may miss. They will also ensure any structural damage and issues are picked up which may save the buyer thousands.
Go to auction: Visit a few auctions as an observer just to familiarise yourself with the process and how it works. Arrive early at the auction of the property you want. Any additional information about the property will be available in an ‘Addendum’ or will be announced by the auctioneer immediately before the auction itself. Such alterations may impact your decision to buy the property.
Bid in person, telephone or proxy: Position yourself in a visible area and bid clearly, you will always be given ample time to make your bid so there is no need to panic. If you are unable to attend the auction in person you can always register to bid by telephone or set a proxy bid.
Stand out: The auction room is generally very busy and noisy. In order for your bid to be recognised it is important to be loud and clear in your bidding. Do not bid more than you can afford because once the gavel is struck, a binding contract is formed.
Bring identification with you to the auction: If you win, you will be asked for identity document and produce your passport or driving licence and a utility bill as proof of residence. You will also be needed to pay 10% of the purchase price.
Stick to your limits: Do not worry if you do not get the property you wanted. Auctions are held regularly and there are always ample properties available. Keep yourself updated with future auctions and catalogues. A list can be found on the NAVA website from where you can find a reputed agent.
Look out for unsold lots: This can be a good way for a real bargain as both the seller and the auctioneer will generally be keen to sell and may accept a lower offer.