Buying a property at auction can be a great opportunity to secure a property at a competitive price, however, it’s important to be aware of the potential pitfalls.
With the right preparation and knowledge, you can avoid common mistakes and increase your chances of a successful property purchase.
In this article, we will discuss some of the most common mistakes to avoid when bidding for property auctions, for a more successful auction experience.
Common mistakes to avoid when buying at an auction
Failing to do your research
Before bidding on a property, it’s important to have a good understanding of the property, its condition, and its history. This includes reviewing all available documentation, such as the legal pack and the auction catalogue.
The legal pack is a document that includes important information such as the title, any restrictions on the property, and any legal disputes. Make sure you understand all the information in the legal pack before bidding.
Failing to inspect the property
Property auctions are usually sold as seen, meaning you won’t have the opportunity to view the property before bidding. This makes it all the more important to thoroughly inspect the property ahead of time and consider any potential issues that may impact its value.
If possible, arrange a viewing before the auction or ask a surveyor to inspect the property on your behalf.
Not knowing the market value
Before bidding, it’s important to understand the local property market and what similar properties are selling for. Research the local market and speak with local estate agents to better understand the current market conditions for a specific area.
Overlooking the costs and fees
When buying a property at auction, you need to take into account all the associated costs, including stamp duty, legal fees, and any necessary repairs too.
Make sure you have a clear idea of what your total expenses will be before bidding and don’t forget to factor in the cost of a surveyor or building inspector to check the property, if necessary.
Not setting a budget
It’s easy to get caught up in the excitement of bidding at an auction, however, it’s important to set a budget and stick to it. Don’t get carried away and bid more than you can afford.
Not having the right funding in place
To secure a property at auction, you’ll need to pay a deposit on the day of the auction. Make sure that you have the funds available and arrange for finance in advance, if necessary.
It’s also a good idea to have a backup plan in case your finance falls through, given that bids are legally binding.
Not understanding the auction process
If you’re new to the auction process, it’s important to familiarise yourself with the process before attending your first auction. This includes understanding the bidding process, the terms and conditions of the auction, and the role of the auctioneer.
You can view our auction guides for buyers on our website, in order to learn more about what’s involved.
Not being prepared to bid
Once the auction begins, you’ll need to be prepared to bid, and often quickly before the gavel falls.
In order to ensure that you’re not getting caught up, be sure to consider all your research and have a clear idea of the maximum budget you are willing to spend before the lot is even presented.
In conclusion, buying property at auction can be a great opportunity to secure a property at a competitive price, however, it’s important to approach the process with caution.
By doing your research, having the right funding in place, and avoiding these common mistakes, you can be more confident in your decision to buy property at auction.
This article is purely speculative and should not be mistaken for financial advice. Readers should consult a professional independently before making any financial decisions.