Before you buy a house at auction you will need to do your due diligence. This means you need to have seen the house you want to buy (preferably more than once) and you will need to understand what is being said in the legal pack, particularly around fees.
Property Expert Series: Andy Thompson From SDL Auctions
- Introducing Andy Thompson from SDL Auctions
- What Steps Should I Take Before I Buy A Property At Auction?
- How Do Property Auctions Work?
- What Is A Reserve Price?
- What Exactly Is In The Legal Pack?
- What Is Off The Wall Bidding?
- Property Auctions – Does It Matter Where I Sit?
- Auctions Fees | What Are The Costs To Buyers And Sellers?
- How Do I Prepare For A Day At House Auction?
- Are Auction Properties More Commonly Vacant Or Tenanted?
- What Are The Risks When Buying A Property At Auction?
- How to Find and Work With Good Property Auction Houses
What To Do Before You Buy A House At Auction
Amy: So Andy, can you tell me, for anybody new who wants to go to an auction for the very first time, what kind of due diligence would they need to do, before they came?
Andy: Everything should be done beforehand. That’s the key. The very last bit of the process is the auction day itself. And, you have to remember if you’re successful in the room, you’re buying the property, legally binding, warts and all. So it’s crucial that you do all your homework before the auction.
1. View The Property
Andy: So, obviously, like you would do with an estate agent, go and view it – and I always say go and view a property a few times.
All auctioneers will allow viewing days. Try and get there, at least twice. And also take an extra pair of eyes as well.
It’s like watching a film for the second time. Sometimes you’ll spot something the next time that you didn’t see the first time. And an extra pair of eyes is always good.
And the legal back is a big part to factor in. That’s just as important as the bricks and mortar, in my opinion.
2. Pay Attention To The Legal Pack
Andy: So, just as you might go and view a property and think it needs some new double glazing, there could be something, just as expensive, in the legal pack that you need to consider.
And, like I say, it’s about factoring everything into your bid – so your maximum bid.
So, if there are some extra fees in there, for example, you will need to factor that into how much you’re going to bid up to.
So, you might have in your head, ‘Well I was going to go to £80,000, there’s £2,000 worth of fees’. You’re now bidding at 78.
It’s obviously important to get all of that out and then check it before it’s too late and you can’t back out.