Home Buying Guide: Buying At Auction

Buying a home at an auction can be cheaper than other traditional routes. The types of properties that come up at auction include those that have been repossessed, are in need of renovation or left empty due to death. They are likely to need a lot of work, but even though a substantial investment is needed to renovate, the low sale cost could mean buying at an auction is cheaper in the long run. There should also be a sales pack full of information about the property, which you will need to pass on to your solicitor a few weeks before the auction. This can be a little expensive as the solicitor will want to make sure the property has no major legal defects before you start bidding and there is no guarantee that you will end up actually securing the winning bid. So it is possible you will have to get a solicitor to investigate a number of properties.

As well as the lower cost another advantage of buying a home at an auction is the transparency of the process. At an auction the other bids are public, so you do not end up bidding more than is necessary.

It is particularly important to make sure when you are buying at auction that you will definitely get any lending required from your mortgage company, so make sure your solicitor and mortgage company are talking to each other before you go along to the auction.

At the end of the auction you will be expected to hand over a 10% deposit with a completion date usually 28 days later (although it may be possible to agree a longer date with the auctioneer beforehand). If you cannot get hold of the remaining sum in time for completion you risk losing your deposit.