A Guide to Successfully Buying at Auction
Thanks to the recent turn in the economic climate providing a rise in properties being resold on the market and a rise in television programmes such as ‘Homes under the Hammer’ showing the returns that can be made on property bought at auction, many people are now considering this as an option to get the property they want. There are so many benefits to buying at auction, however it is really important to understand the process so you go into it with your eyes wide open and don’t expose yourself to potential legal issues or monetary sanctions. This guide will help you to plan and buy safely at auction.
- Financial Considerations – whilst you may think that finding the property you want is the first step, you really do need to think about the financial issues around buying at auction. The first difference is that you will have to have 10 per cent of the purchase price available to pay on the day of the auction when you sign the contracts on the property. In addition, you will also have to secure the remaining 90 per cent of the purchase price within 28 days when you complete. If you do not comply with these requirements, you will lose your 10 per cent deposit. Ensure you have a mortgage agreed if you need one, before you go to the auction.
- House Details – start by contacting some local auction houses and ask for their brochures, normally printed weeks ahead. You may find properties for auction on websites like Alsops or Daft.ie too, so look around. Once you have the catalogue, go through and identify all the properties that you are interested in and arrange viewings for them all. Details of how to do this will be in the catalogue.
- Speak to a solicitor and estate agent – Get local estate agents’ opinions on how much the property is worth, which will give you an indication of how much you should pay and ask a solicitor to check over the terms and conditions listed in the sale catalogue and to complete searches for you.
- On the Day – there are some things you need to remember to take with you; two forms of ID, your chequebook and your bank details. It is a possibility that you will need to register before you can bid, so make sure you leave plenty of time to do this before your lot is up for auction. Properties are withdrawn at the last minute or sold beforehand so get a copy of the addendum sheet that will be available on the day and check the property is still available.
- Bidding – stand in clear view of the auctioneer and make sure you make clear gestures or else you could be missed. When the auctioneer suggests a bidding price, clearly raise your hand, clutching the auction catalogue to increase visibility, to signal that you are bidding at that price.
- Win or Lose? – Even if the property does not meet the reserve, your bid may be accepted after the event. Leave all your details with the auction house so the vendor can get in touch if they wish. If you win the house you want, congratulations! Pay your deposit, sign the contracts and don’t forget insurance cover!
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