March 11, 2008

Buying property at auction

For someone who visits the local property auction they will notice that the whole process is entirely different to way that everyone else has to buy their home. The auction will leave the buyer in control they have the financial limitations and can see step by step as the prices gradually creep up until it all stops and the winner of the auction walks away with the keys to the property, preferably at a knocked down price compared to what the same property would fetch at the local estate agents.

A buyer needs to be organised, its not just the bidding, its getting the price right first, then within a couple of days it is possible to exchange contracts, pay the ten per cent deposit and then normally it may be around twenty eight days before the property is actually theirs.

Find out what the auctioneer’s procedures are for the following:

Proxy, internet or telephone bidding (if you or your solicitor or agent can’t attend the auction)
Signing the Memorandum of Sale
Responsibility for insurance on the property. Generally, insurance on the property is up to the buyer as soon as the hammer falls
Paying the deposit
VAT – the auctioneer will ask the seller whether or not the sale is subject to VAT. If so, you need to know the impact of VAT on the deposit and completion amounts
Checking your ID
Pre-registration

Buying at auction can be very exciting and rewarding, but it can also be a financial nightmare if it all goes wrong.

Source [UK Property Auctions]