Benefits of Buying at Auction
Chances of a Bargain
Auctions really do offer the chance of a bargain. It is just as true of property auctions as it is in furniture and antique salerooms. There is an abundance of TV programmes that will confirm this and they clearly demonstrate the public’s attraction to the auction process.
Certainty of Success
If your hand is up when the hammer comes down then you will have exchanged contracts and the property will be yours. No one will be able to step in and take it away from you. There will be no chance of the seller changing his mind or a break in occurring somewhere in the transaction. You will have bypassed that anxious, uncertain, often lengthy period which private treaty buyers experience between agreeing a purchase and getting to an exchange of contracts.
If you want to buy an Auction property the process is quick and easy. There is a fixed, known timescale at the very beginning – the auction date is set and the period from then to completion, which is usually 28 days, is stated in the Special conditions of sale. You know how long you have got to evaluate the property, obtain advice and expert opinions, and determine your maximum bid price.
Auction properties often offer opportunities for improvement and value enhancement. Many require work that can be tailored to your own personal requirements. Some lots include development potential, others offer changes of use options (subject to planning) and can be converted to suit your future needs. Buyers are often looking for properties that will add value and generate resale profits – auction regularly provides these opportunities.
No Hidden Surprises
APS work closely with sellers’ solicitors aim to make available relevant documentation including Title, Leases on tenanted properties, relevant Planning Permissions and Scheme layouts for developments plans. These made available upon request. We will be happy to provide an explanation and give general guidance too, should this be required.
Everyone has an equal chance at Auction. It isn’t a first come first served arrangement. Most properties entered into Auction are sold under the hammer. This shouldn’t stop you putting in a pre-auction bid if you are very keen on a particular lot. For it to be accepted, it would need to be a very strong bid and at a level that might not be reached by competitive bidding in the room.
Often buyers get a property knocked down to them at a lower price than they were willing to bid up to, and by doing so will purchase at less than what would have been the case by Private Treaty, Tender or invited offer. What is more, buyers will have the reassurance that other bidders share the same opinion of a property’s value as they do and you should only have to be one bid ahead of your competitor or get to the reserve price to be successful.
Immediate Tenancy Income
If you buy a tenanted property you will start receiving rental income from the day of legal completion. Your investment starts delivering from the moment you take ownership and you can factor this into your evaluation of its return. The legal benefits of the Tenancy Agreement will pass over to you along with the responsibilities that is contains.
Right property and Right Purchase
You will be interested in a specific Auction Property because it is right for you and you will want it for a specific purpose. Sometimes for your occupation or use, other times as a project or perhaps as an investment. You will already know why you want it – your purchase will likely be part of a bigger plan, financial, family or business related. Auction often offers the opportunity that you have been thinking about and the urgency it brings could persuade you to commit to that plan.
Nowadays there are specialist lending options available that will help you to complete your purchase with temporary funds, prior to your preferred long-term mortgage being put in place.