Technology has rapidly transformed the property market with sellers and estate agents turning to online auctions as an avenue for completing sales. Buying your home by auction can seem to be a nerve-wracking venture but if something catches your eye don’t be afraid; these 7 simple tips will help you wind your way through the process:
1. View the house. As with every sale it’s highly recommended that you view the property, even if it’s a virtual viewing. If the property is not available to view be aware that it could have major structural issues not evident in a picture. Getting a fixer upper is one thing. Buying a house that is structurally unsound is a completely different matter.
2. Know your rights. If you are buying land with a view to building for example, you must make sure that you can get planning permission. There would be nothing worse than buying the property for your dream home and then discovering that you cannot build on it. Get your solicitor involved from day one. The estate agent will make legal documents available for the auction so make sure you download them and get your solicitors opinion before the auction starts.
3. Scout the area. Another potential hazard to buying your home at auction is not knowing anything about the area. It would be well worth your time to do some investigating. Is the property in an area that is prone to flooding for example? If you can’t visit the area in person, google maps is a great tool. You may also find information on the county council websites.
4. Stay cool. Don’t get caught up in the heat of the moment. You may find yourself getting very excited during the auction. Don’t get carried away. Stick to your budget and if someone else wants the house more than you do, let it go. As the saying goes, it just wasn’t for you.
5. Remember the contract. There are two types of online bids: “Binding” and “non-binding”. “Binding” means that you have placed a bid with intent to buy, so if you don’t live up to your end of the deal you may be liable to serious legal consequences. The “non-binding” bids, sometimes called “private treaty” sales simply mean that, up until when you enter the contract, you cannot be pursued if you fail to complete on the transaction. As with every legal matter, please consult your solicitors before making any decisions.
6. Talk to your bank. If you are getting a mortgage, be very careful. Auction sales are binding which means no “subject to loan approval” clauses. If you go ahead and buy at auction, then find out the bank cannot lend on that property e.g. there are tenants living there and your mortgage does not cover investment property, you may find yourself in a very tricky legal situation. Your solicitor will again prove invaluable here, not to mention the estate agent can guide you.
7. Talk to others. Finally try to talk to people that have experience with buying at auction. You can learn a lot from the experience of others. Especially talk to the estate agent. It’s in their interests to secure a buyer that can complete on the transaction remember. If the property is not right for you, they will be very forthright in telling you. Take advice and use common sense when entering into a real estate auction.
If you follow these simple steps, you will emerge as the winner and have a fabulous home to show for it. Best of luck.