For example, I knew that a similar property in slightly better condition was selling for £627,000 a third of a mile down the road.’
way through the garden. This is available for free before the sale.
Sometimes, the pack includes ‘special conditions’ that mean you might also be liable to pay an additional three per cent fee to a sales agent.
You can do this by visiting local estate agents and asking about the market and rents charged in the area or by using property websites.
But the buyer is perfectly within their rights to also pursue you for damages due to a breach of promise, which could result in bailiffs knocking on your door demanding money if you fail to pay up.
Bernadette says: ‘Sadly, it was due to a death in the family and desire to downsize quickly. The home was a doer-upper but with no major problems such as subsidence revealed in the legal pack.’
They can then provide a realistic idea of its true worth and also spot any potential problems, such as rotting timber frames or signs of damp.
Contact a mortgage broker or lender weeks before the auction armed with details of the property you are looking to buy, its guide price and the maximum you are prepared to pay.
Steal: This Notting Hill flat sold for just £410,000 at auction with similar properties on the same street selling for up to £1m
House viewings are just as important when buying at auction as when doing so on the open market. Properties should be open for viewing in the weeks beforehand.
Clifton Private Finance charges 0.55 per cent a month for such loans. If you cannot get financing you are in trouble. When the gavel went down the purchase was legally binding, so at the very least you lose your deposit.
However, there are reasons when it could work out well, for example, if it is a probate sale and the next of kin wants to dispose of the property quickly, if they seller wants a quick deal because they have been let down by buyers at the last minute, or the owner is the council with housing association stock they want to sell.
A spokesperson for broker Clifton Private Finance says: ‘You can secure an auction property with a bridging loan and refinance on to a mortgage as a fast and convenient way to secure finance, allowing you time to apply for a mortgage as a loan-term solution. You usually only pay interest on the months you have the loan for.’
Those bidding online must hand over a £6,500 refundable deposit even before they are allowed to bid, while for phone bidders it is necessary to initially deposit 10 per cent of the reserve price.
On the open market such a property would cost more like £300,000. The 20-year-old friends grin from ear to ear – they may have secured a steal for themselves.
Bernadette Anderson, 46, of Richmond in West London, purchased a three-bedroom semi-detached house in nearby Whitton at auction for £474,500 just over a year ago.
Buyers Oscar Ryan and Adam Roubicek have just bagged themselves a one-bedroom flat in London for £265,000.
The auction room goes quiet in suspense as the auctioneer raises the gavel above the block with a theatrical flourish.
Ask the auctioneer before a sale why a particular property is on the market. Reasons that would make it difficult to sell on the open market should set alarm bells ringing.
Sandeman adds: ‘Auctions are like buses – so if you miss your dream property do not worry too much as another will come along later. Never allow yourself to feel panicked into a purchase.’
A Grade II-listed former church near Bristol sells for £200,000. While another church in the town sold for £475,000 last year.
Sold: Oscar Ryan and Adam Roubicek bagged themselves this one-bedroom London flat for £265,000 at auction which would have cost around £300,000 on the open market
This in part reflects the types of property that go up for auction, as they are more likely to be in poorer condition or at the lower end of the market.
Most properties bought via auction have a 28-day competition date and home loans for auction properties can be harder to get.
If your guide price is at £250,000 you may find it attracts fewer bidders.’ Buyers should decide in advance how much they are happy to pay – and not go above that.
These two young men are part of a growing army of house hunters going to auction. Sales were up a third last year, according to EIG Property Auctions – with some 50,000 homes going under the hammer.
Having spent £300,000 on renovating the property Bernadette recently had it valued at £1million and plans to put it on the rental market this year.
The time frame for getting a mortgage arranged is the main stumbling block with an auction – not the rate offered, as this should be no different to other home purchases.
Here, a flat in London’s Notting Hill goes for £410,000 – similar ones on the same road have sold for more than £1 million. A two-bedroom house in Sale, Greater Manchester, sells for £170,000 – similar properties in the area have sold for more than £200,000.
If buying with a view to renting out a property you need to get a buy-to-let mortgage, which is typically two percentage points higher than a standard residential one.
Bidding on a buy-to-let bargain
At this point they must hand over 10 per cent of the sale price, plus £1,500 in commission to Barnard Marcus. The auctioneer takes debit cards, but not credit cards, cheques or cash.
Guide prices are often a poor indication of what a property will go for as sellers use tricks to get the best possible result.
You can also do a basic survey of the property to check for any issues.
If you cannot understand technical jargon, ask a solicitor to translate the information – this usually costs around £200.
‘So you must be totally upfront and disclose all the details about the property you are interested in purchasing and not expect to be able to borrow more than initially agreed.
Phillip Arnold, who runs Phillip Arnold Auctions in Ealing, west London, says: ‘It amazes me how people are often happy to spend at least half a million on a house, but not a few hundred pounds on getting the property properly looked at – ideally not only checked out by a local builder but also with you paying perhaps £400 for a basic survey to be done.’
I visit a Barnard Marcus auction on a chilly winter morning in a half-full ballroom at the Grand Connaught Rooms in Covent Garden, central London, to find out who is buying and learn the tricks of working out whether an auctioned property is a steal or a money pit to be avoided.
You also need proof of income and affordability, so you will need to provide three months of payslips and bank statements, as well as any other relevant financial documents. Lenders typically only offer you a loan on a property which has both a working kitchen and bathroom.
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