It’s important to check out possible downsides to auction properties. In this video, we discuss potential problems and important things to check when buying a property on auction.
[0:19] Three specific things to look at when purchasing a property on auction
[0:21] Don’t forget about all the costs
[0:47] It’s important to check out certain things before bidding for a property at auction
[1:06] The legal pack for a solicitor to look at and getting a surveyor for any structural issues
[1:33] Hidden problems you could face
On the same kind of question where we’re looking at, specifically, auction properties and potential problems or pitfalls or downsides to auction properties.
First thing to consider, we said, was speed.
Second thing to consider is the cost associated with buying properties at auction. There may be some costs there that you have to spend before you even get the potential to buy it, things like surveys or checking the legal pack.
The third thing to consider is issues that may be hidden as to why that property’s going to auction. There are some legitimate reasons why properties or, many legitimate reasons why properties are sold at auction, but there are problem properties that are put into auction as well, for a quick sale.
Check out the property first
That’s why it’s important to check out things, from structural issues, to make sure the property is sound. That could be viewing the property with a builder, it could be getting to stay around to do an inspection of the property, also issues potentially with the legal structure of the property in terms of hidden property leases or any issues surrounding typically, the legal pack. Every property that is sold at auction would come with a legal pack. That’s something that the seller would provide and as a buyer, you could have a look at that legal pack, see if there’s anything that you could spot in there, any problems that could potentially be associated with the sale.
It’s very easy to miss those as a potential buyer and that’s where the rest of us kind of come into our own. I would always recommend using a solicitor to check that legal pack for you so you don’t run into any claim problems or certain problems that might be associated with that sale.
The main three things that I’d probably consider in terms of potential problems with buying at auction or benefits of buying at auction as well, you get a lot of very good deals there but things to consider is the speed – are you in a position to buy the property quick enough with the time frames that are associated with it?
Consider the cost
Second one is going to be the cost. So are you happy with potentially paying out for surveys, checking the legal pack with a solicitor beforehand to make sure. From a cost perspective or to make sure from a purchase perspective, is this the right property and there’s no issue associated with it?
The third thing is kind of hidden problems as to why that property might be going to auction. As I said, structural issues that may be a bit hidden that you can’t really see or aren’t easy to spot if you go around there on your own. That’s why it’s important to maybe have a builder or have a surveyor check the property for you for problems hidden deep in the legal pack to find out why the property is being sold. That’s why I would generally recommend using a solicitor on that side.
As long as you’re going to take care of those three elements, auction could be a very good place to buy.