Property Auctions: What to Do Before Going

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.

FAQs

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.