Whether you’re an investor, landlord, property developer or just a prospective buyer on the hunt for a new home, you may have considered the option of finding a property via an auction instead of approaching an estate agent or private seller directly.
Here, we’ve put together a two-part Q &A guide to what to consider. Part 1 first covers everything to get you started, from navigating through the terminology, to the various types of professional advice you might require. Part 2 covers guidance on making a bid and what to expect on the day itself.
And as a property preservation company ourselves, we also cover the role we play in supporting you to make sure you know what you are buying and most importantly how to get problems resolved quickly and correctly.
Happy house hunting – and don’t forget, we’re on hand for you to contact us with any questions about booking a survey or issues on a property you are looking to purchase.
Q: How does buying a property at auction differ from buying from an estate agent or private seller?
- The pricing strategy
If you are interested in buying a property from an estate agent or a private seller, the party in question will quote an asking price. Normally, the property will be expected to sell at on or around this amount.
Auctioneers will quote a guide price, which is an indication as to the reserve price that has been placed on the property – not necessarily how much it is expected to sell for. In theory, then, you could get a better deal on an auction property – depending on how many other people are willing to bid on it.
- Speed of buying a property
If you’ve ever bought or sold your home through an estate agent, you’ll know that it can take weeks, if not months, to complete the deal. But when a property goes to auction, there can sometimes be only a matter of days between the property’s release and the auction day itself. You’ll need to keep a close eye on auctions in your area and act fast to secure the property you have in mind.
- Access to further afield property
If you have a good idea of where you want to live, you may feel more comfortable working with an estate agent. They will typically source and sell properties within a particular town or region and they’ll have a good knowledge of the market in their catchment area. Auctioneers, however, can travel up and down the country sourcing and selling properties.
Q: What’s the difference between guide and reserve prices?
The guide price indicates the minimum expectation from the seller. Bidding will start at this price.
The reserve price is the lowest amount that the vendor is prepared to sell the property for. The Auctioneer cannot sell the property – otherwise known as the Lot – for any lower than the reserve at auction.
Q: Should you view the property before the auction?
It’s always advisable to view the property before placing a bid because it’s up to you to make sure your purchase is sound before you enter into a contract. Most Auctioneers will request that you book your viewing in advance; and they may well organise block viewings that need to be confirmed by prior appointment.
The viewing itself will usually last between 20 and 30 minutes, which should give you time to investigate the property and ask the negotiator any questions that come to mind while you’re on site.
The vendor, in conjunction with the Auctioneer, will provide prospective buyers with room sizes and site measurements. However, these will often be approximations that have been collected from architects, Land Registry or Ordnance Survey plans. For extra peace of mind, you may well wish to confirm that all measurements and plans are accurate before making a bid.
Q: How do I check the property’s legal documents?
The catalogue, which will include all relevant Title Details, Leases, Searches, Planning Permissions and Plans, will be made viewable by the Auctioneer before the auction takes place. You should check through the catalogue in detail to ensure you’re happy with the condition of the property and fully aware of any concerns or constraints relating to the Lot.
If there is an accompanying Addendum Sheet, be sure to go through this with a fine toothcomb, as the seller could have made some substantial alterations to the original catalogue that may affect the viability of the property.
Be sure to also read the Auctioneer’s Common Auction Conditions and Special Conditions of Sale. These should be readily available free of charge.
Q: What professional advice do I require?
At this stage, we can’t stress how important it is to consult a solicitor or licensed conveyancer – especially if this is the first time you’re buying a property at auction. He or she can analyse the legal documentation that accompanies the property and provide you with expert advice before the hammer falls and you’re bound by the Contract of Sale.
Q: How can I check the condition of the property?
This is where a property preservation company, such as ProTen can help. As damp and timber specialists, here at ProTen we can carry out an initial damp survey, or timber survey on the property if you have concerns that it may be experiencing. We can also carry out a property maintenance assessment.
Our surveyors offer pre-purchase damp and timber reports that will quickly identify any problems and suggest ways of remedying them and a quotation for any works. Having an advisory report in place means you are aware of the costs to address any issues such as damp, condensation or woodworm problems and have us ready to move quickly to carry out any necessary remedial treatment once you have purchased the property.
To find our more information about how damp can affect properties please visit our website. You can also find information about the types of surveys we provide and complete our online enquiry form with any questions.
Part 2 will be coming next week so keep an eye out!