Property Auctions: What to Do Before Going

Property auctions can be pretty exciting. And why not? You’re bidding against the competition and working to win a property you want!

10th June, 2023

Updated 11/10/2023

Property auctions can be pretty exciting. And why not? You’re bidding against the competition and working to win a property you want!

These auctions are also a great way to buy a property without going through the entire conveyance process. They also are free of the tension that can develop worrying whether the other side will pull out of the sale. That’s a fear that stays with you all the way to completion. Furthermore, it’s possible to find some great bargains at a property auction—these properties usually sell for a lower price than on the open market.

Even so, it’s essential to know how to prepare before attending the auction. It takes careful planning, which we discuss in this article. You’ll find tips on what to do before the property auction.


What is a Property Auction?

A property auction is the process of selling a property via a live bidding process. You compete with other potential buyers to buy the property. The property is sold to the highest bidder.

These events usually have a catalogue of properties that will be included in the auction. Search through the catalogue for properties you like and focus on those that would make the best investment.


1. Research Properties in the Area

After finding a property (five is usually a better number) you’d like, the first step is to do some research on properties and auctioneers in the area. Let them know which property you’re interested in and arrange a viewing. This needs to be done before the auction.

As you view the property, try to find any hidden issues that may not be highlighted in the brochure description. Some may be minor issues, but you want to make sure that’s the case before you buy. Viewing the property also provides you with additional information about the property and the neighbourhood it’s in. You can also determine whether the property’s price fits your budget.

It is possible to arrange to view properties more than once at different times of the day. That way, you can get a better feel for whether the property is a good fit or not.


2. Carry Out a Full Structural Survey

Buying a property at auction is exciting; however, what isn’t as exciting is finding out the property has structural issues or other problems that make that potential asset a liability. No one wants to buy a property like that.

To avoid these issues, make arrangements to conduct a complete structural survey of the property. The surveys are more expensive than a basic surgery, but they’re thorough, and you’ll learn more about the property. A complete structural survey may turn up problems that were not obvious and not disclosed in the marketing materials. Learning about serious problems with the structure saves you money in the long run.


3. View the Property with a Building If Possible

We highly recommend seeing the property with a builder, especially if the structure is in disrepair. The builder can provide cost estimates for any needed repairs or renovation work and give you advice on how large a project it would be to repair the property.

A builder will also be able to offer guidance on whether the property is one that’s worth buying or not. If you win the auction, the builder will already know what needs to be done with the property. You can also get started with the repairs that much faster, as you’ll already have the cost estimate for the entire project.

During the property viewing, it’s a good idea to ask any questions you may have about the property.

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4. Set a Clear Budget

Before heading to the auction, it’s always a good idea to determine your budget. Once you have a price in mind, stick to it as much as you can, even if your budget is more flexible. Setting a maximum price you won’t go over can save you quite a bit of money.

The reason is that with a maximum budget set in advance, you can stay focused on the price. It’s also much easier to avoid getting caught up in the excitement of the auction. You can easily get carried away in the bidding process. The result could be buying a property at a price you can’t afford or sustain over the long run.


5. The Legal Pack is Essential Reading

The legal pack is a crucial document that forms the basis of your purchase. The pack contains information supplied by the vendor’s solicitor, which includes the title deeds and results of local searches. Be sure to read the pack thoroughly, including the small print.

If there are parts of the legal pack you don’t understand, ask your solicitor to study the pack. This is usually done for free. Learning everything possible about the property before you buy saves headaches and problems later.


6. Prepare the Solicitor to Start the Conveyance

Once you’ve bought the property, the buying process goes pretty fast. So, it’s important to have your solicitor ready to start their work after you win the auction. You have 28 days from when the auction transaction is completed, which is a period that goes pretty fast.

We recommend working with a conveyancer experienced in dealing with property bought at auction. They will have more familiarity with the strict timelines and know about some of the quirks that may appear when dealing with this type of property.


7. Get All Your Finances Ready Before Auction Day

Having your finances ready before auction day can save you time and hassles. So, make sure the funds are available. You’ll be required to pay at least 10% of the purchase price once the auction ends and the balance upon completion.

If you’re purchasing the property with a mortgage, line up a lender who is ready to grant you the mortgage. You’ll also need to obtain an agreement in principle from the lender.


Summing It Up

Buying a property at auction can be a risky prospect; however, if you follow the steps outlined in this article, you have a good chance of finding the right property for your budget.

Doing your research, viewing, setting your budget, and reading the pack are the keys to purchasing the right property at an auction.


Can I attend a property auction without financing in place?
It’s possible, but having financing in place increases your chances of winning the bid and demonstrates your commitment to the seller.

What should I bring to an auction?
Bring identification, proof of funds or pre-approval, and any required registration documents.

Are property auctions suitable for first-time buyers?
Property auctions can be challenging for first-time buyers, but with thorough research and preparation, they can still be a viable option.

Is it essential to attend open houses before an auction?
Yes, attending open houses allows you to inspect the property and assess its condition, which is crucial before bidding.

What happens if I win the auction?
Winning the auction means you’ve entered a binding contract to purchase the property. Ensure you’re prepared to meet all financial and legal obligations.

How can I avoid overbidding at an auction?
To avoid overbidding, set a strict budget and stick to it. Remember your financial limitations.

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