Essential Tips for Buyers Looking To Bid at Property Auctions

A great way to buy a property can be via a property auction, but taking part in an auction for the first time can also be daunting if you’re not fully prepared. Read on for some essential tips for buyers bidding in a property auction.

Sellers may opt to choose an auction in order to complete a sale as quickly as possible. Additionally, an auction setting can create a greater sense of competition among buyers, which can drive up the price of a property, an obvious advantage for the seller.

The speed of the process can also suit buyers who need to move quickly. In addition, they can provide the ideal way to purchase a unique or unusual property, such as a historic building or properties with development potential.

Do your research

Before you start bidding, it’s important to do your research on the property and the auction house. Find out as much as you can about the property, including its condition, location, and any potential planning issues. You should also research the auction house to make sure they are reputable and have a good track record.

You may want to consider attending a property auction (though many are held exclusively online) with the sole intention of observing rather than actively taking part. This can help you to understand the process better, observe bidding strategies and gain additional insights.

Get your finances in order

Before you even think about bidding on a property at auction, you need to make sure you have your finances in order. This means having a mortgage approved in principle and having a deposit ready to pay.

You should also be aware of the auction buyer’s premium. The buyer’s premium is typically expressed as a percentage of the hammer price and is payable by the successful buyer on top of the winning bid.

Set a budget

It’s important to set a budget before you start bidding on properties at auction. This will help you to stay disciplined and avoid overspending. Remember that the hammer price is just the starting point, and you may need to bid higher to secure the property.

Register to bid

Auction houses usually require potential buyers to go through a registration process to participate in the bidding. This registration process helps the auction house manage the bidding process more efficiently and ensures that only serious buyers are involved.

Once you’ve found a property that you’re interested in, you’ll need to register to bid at the auction. This usually involves providing the auction house with your personal details and proof of identity and you may also be required to pay a registration fee.

Inspect the property ahead of time

Viewing a property online is all well and good, but whenever possible, you should always inspect the property in person before you bid at the auction. This will give you a chance to see the property for yourself and spot any potential problems that may not have been obvious during a remote viewing.

If you’re unable to inspect the property in person, you should ask the auction house for as much information as possible, including photographs, EPC and floorplans.

Be prepared to walk away

This is potentially the most important tip to remember. Don’t underestimate how easy it is to get swept away with the excitement of bidding which could potentially lead to a common sense bypass.

Keep your absolute maximum budget in mind and If the bidding goes beyond that, be prepared to walk away. Don’t feel pressured to buy a property just because you’ve already bid on it or because you’d set your heart on it. It’s better to miss out on a property than to pay more than you can afford.

Understand the legalities

Once the hammer falls, you’re legally bound to buy the property. This is why it’s important to have your finances in order and to be prepared to exchange contracts promptly.

You’re typically required to complete the purchase of a property within 28 days of the auction. Make sure you have all the necessary documentation in place and that you’re able to complete the purchase on time.