Getting the best out of property auctions

Getting the best out of property auctions

 

With first time buyers looking for ways to get their foot on the property ladder, more of them are turning to property auctions. However, success in this volatile field can be difficult with sellers looking for a great price and buyers looking to snag a bargain. It’s a complicated game of cat and mouse; to be successful, both sides will need to adopt the right strategies.

Property auctions used to be places for the professionals but that is now changing. The lure is not hard to see. There’s no chance of being gazumped – once the auction is over that’s the end of the story. Add to that the simplicity of cutting out estate agents, savings on fees, and potentially picking up some real bargains, and auctions represent an excellent option.

Auctions also make sense for many sellers. They are a quick root to market if you’re looking for a quick sale, or for those houses with potential but which need a lot of work. These might have a difficult time in the conventional market, but at auction they’re finding a ready audience among wealthy people in their 50s looking to make their final purchase.

However, there can be pitfalls for both sides. Sellers may not necessarily get the price they’re looking for while buyers will be worried about taking on a house which has too many issues. Success for both sides depends on how they approach it.

Buyers should ask a few questions to decide whether auction is the right option for their property. Properties which are unique and eccentric may find a market here where people will be willing to pay what they feel it’s worth. If you once fell in love with the property, there’s a good chance that others will feel the same way at auction. Auction will also be useful if you are looking for a quick easy sale. Once the hammer comes down the buyer has a legal obligation to pay. They’ll have to come up with 10% of the price there and then and will have 28 days to come up with the remaining balance. It removes a whole lot of delay and uncertainty.

Buyers, on the other hand, should do as much due diligence as possible. Visit the property and try to get an idea of any problems such as dry rot and structural damage. Find out whether there are any legal issues with land use or problems with the neighbourhood.

A lawyer may also come in handy. Once you express an interest in a property there will be a lot of legal literature to read. Make sure you go through this thoroughly. There may be all sorts of legal covenants and obligations involved which can impact the value.

When it comes to the property auction itself, the maxim is to be prepared. Research what properties are available at the auction and get an idea of what their market value might be. Decide which ones you’re interested in and find out everything you can about them. Prepare your finances. Once you agree to buy you’ve entered into a legally binding obligation. You’ll need to know that you have the funds available.

Last but not least, don’t get carried away. Property auctions can be exciting places. The blood will be pumping and it’s easy to get carried away with the whole experience. Make sure you have a maximum price in mind and don’t go over it. Make a plan and stick to it.

Property auctions offer benefits for all sides, which is why both buyers and sellers are turning to this option in increasing numbers. For both, the secret is to do your homework and approach it in the right way.

 

 

Written by: Rob Limbert on Friday 14/08/2015

The Dos and Don’ts of Purchasing a Property at Auction

The Dos and Don’ts of Purchasing a Property at Auction

 

Months of back and forth between vendors, the bank and solicitors are eliminated, as the home-buying process can instead take a matter of minutes. There are a number of bargains to be found at property auctions, but similarly, there’s the propensity for disastrous deals to be made if the right research and preparations aren’t carried out.

If you’re heading to an auction, keep in mind the following tips to have the best possible experience:

Do carry out the standard research prior to going to auction. Just because the method of sale isn’t conventional doesn’t mean to say that the due diligence should be any different when buying a house through auction.

Do familiarize yourself with the process before embarking on it yourself. You could accompany a friend, or simply sit in an auction to get a feel for the process, which can make you feel more comfortable when it comes time to bid.

Do have surveyors look at the property beforehand. A property with a low price tag in a great up-and-coming locale may seem like a good deal, but if it is riddled with severe structural deficiencies or issues that are going to require substantial time and capital to put right, the costs of renovations can quickly leave you out of pocket.

Do sort out your finances prior to attending the auction. When the hammer falls, the winning bidder is expected to sign the papers and part with the deposit on the spot. Unless you are entering into a cash deal, you will need to have your mortgage in place, and any funds required for completion available. Failure to do this can give the seller grounds to sue for the full purchase price!

Do take someone with you, and if they have experience in buying at auction, even better. A bidding war on a property can be exciting, and there’s the potential to become carried away and more engaged in the competition than the property itself. If you have a propensity to run away with the exhilaration, have a friend, family member or partner with you to act as the voice of reason if necessary.

Don’t buy a property on a whim. Repossessed homes in particular can seem like great deals, but they can house a number of problems that the current owners do not have the money to put right. If you buy without visiting the property with a solicitor or surveyor (ideally both) first, you could inherit those problems along with the property.

Don’t enter into an auction without having notified your solicitor, and discussed the property in question with them first. They will be able to inspect the property’s title and alert you to any “buyer beware” scenarios. There can be restrictions in place when purchasing a leasehold property (such as the prohibition of pets), so having the legalities carefully assessed before going to bid is wise.

Don’t put in a bid before asking all relevant queries (Why is the property being sold at auction instead of through the local market? Was the property used as a rental?) Certainty is key in an auction, and if you have reservations or questions, you don’t want to end up in a position where you’ve been awarded the property without having those answered.

Remember, the winning bid is contractually obligated to follow through with the purchase, which means the stakes are high. For confident bidders, it can also mean that there are great deals to be had, and bearing in mind the above points will place you in good standing to win them.

Have more questions about buying property at auction? Contact the experts at Eddisons to have your questions answered, and receive expert advice.

 

 

Written by: Rob Limbert on Monday 27/07/2015

 

Business Rates Review Welcome But Short-Term Measures Also Needed

Business Rates Review Welcome But Short-Term Measures Also Needed

 

Rod Edwards, head of rating at Eddisons, welcomes the Government’s review of business rates confirmed in this week’s Budget but says it should be doing more to help businesses with their rates burden now.

“The Government is keen to flag what they are doing to help businesses from 1 April 2015 but they should have gone much further. As a minimum, they should have made the retail relief scheme easier to apply for across the board, removed the liability on rateable values under £12,000 and introduced monthly instalments on rates payments as standard.

Rod is also sceptical that the government will make large-scale changes to the current rating system, following the review, no matter what industry suggests. “With business rates raising over £20 billion annually, the Government simply cannot afford to do away with this level of revenue. Businesses should not be fooled into thinking that a review will necessarily reduce the rates burden.”

As for Rod’s recommendations, he argues for a shorter revaluation period of three years, with an antecedent valuation date one year before, so that rates bills more accurately reflect the prevailing economic backdrop.

 

Written by: Craig Newton on Monday 16/03/2015