Ever been tempted to purchase a property from an auction? You’re not alone, and many people find their perfect property at foreclosure auctions and snag a bargain in the process. In fact, heading to an auction is becoming an increasingly popular way to purchase property due to the bargains you can find.
However, property auctions aren’t for the faint-hearted, nor are they something you should attend without any knowledge of what happens and what you need to do to participate. There’s a lot more that goes on than shouting and bidding wars. If you’re about to venture to the auction house for the first time in pursuit of finding the perfect property, here are a few tips you ought to know.
Know the Property
You need to be prepared long before the actual auction day. Take your time to look at the listings and the dates they’re going to be auctioned, then get prepping. You need to look at the auction catalogs, study them, and understand the property. Keep an eye out for liens and titles, as well as past sales, to help you build a picture of the property or properties you’re hoping to bid on. Don’t just rely on what you see in front of you, either; dig a little bit deeper.
Try to find out if there have been any property disputes, applications for planning permission, even for commercial buildings, and review zoning rules that might impact your future plans. Even talking to neighbors can uncover all you want to find in the catalog.
Because even if the property looks like a steal, the more you know, the better prepared you can be, and the easier it is to avoid making the wrong decisions.
View It
As much as you can, view the properties you’re interested in. You can arrange full viewings if they’re offered by the auction house, or you can take yourself to the property and have a look from outside to get a feel of the condition and the local area too.
Check if there are open houses or viewing days you can attend; even a quick walkthrough can be enlightening. Try to take someone with you who knows what they are looking for to identify issues, take a notebook or record videos, or have something to look back on when you leave, and check the major areas that indicate a problem; walls for damp, the roof, basements, and structure, as well as plumbing and wiring. Even if you’re fixing it up to flip and don’t mind the work, knowing what you’re facing can be a huge help come auction day.
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Have A Plan and Funds Ready
You need a game plan, and you need funds in place before you head to an auction. These things move fast, and if you land the winning bid, you need to be able to put down a deposit there and then and settle the full amount within 14 to 45 days as per the auction house rules. This means there’s no time for standard plans and mortgages; they simply can’t move that quickly.
Apply for funding and have your finances in order before the hammer drops. This means speaking to lenders who understand the auction process and can line up an auction bridging loan, even if just in principle, to help you out and complete the purchase. It also enables you to bid confidently as you know what limit you can go to and afford, as you have the funds in place.
