Buying at auction, whether in a sale room or increasingly online, puts you in with a chance of bagging a property at a great price. But it it's far from risk-free!
Thousands of properties are sold each year at auction. While they can be a popular way for investors and buyers looking for properties to do up and sell, they also attract mainstream buyers and sellers. Most auction houses publish their catalogues around a month before the auction, but some leave it until as little as two weeks before.
Each property will be listed with a guide price, which is what the auction house or seller thinks it could be worth. This is different from the reserve price, which is the minimum price the seller will actually accept - this is usually kept confidential.
Guide and reserve prices can change up to, and on the day of, an auction.
While auctions can be exciting, they're not for the faint-hearted, and it's possible to get caught up in the moment and bid more than you intended. If you're worried about this, think very carefully about buying using this method.
The home buying process is different to a standard purchase. The main difference is, once the hammer falls or the online auction officially ends, you are legally committed to buying the property - You CANNOT change your mind!! This means that if you're relying on finance and it doesn't come through, then you're in breach of contract. You'll face losing your whole deposit, and could face further penalties too.
You need to have the money ready in advance - if you win the auction you'll have to pay a deposit on the day, and will only have a set number of days (usually 28!!) after that to pay the total purchase price to the seller. So any uncertainty around finance is a real risk you face when buying at auction - Our Brokers can help you get your finance in place in advance of making a bid.
So buying at auction could work for some people but be very careful and talk to one of our Brokers well in advance.
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