Buying Property at Auction

Many would be property investors in the UK are attracted to the idea of buying a property at auction as there is a good chance of buying a house at less than its true value on the open market. Buying a property at auction is also a lot faster than buying through the usual channels.

Two types of property that are almost always sold at auction and represent excellent chances for the budding investor are executor sales, where the previous owner has died, and repossession sales, where the previous owner has defaulted on the mortgage. Both of these options offer the prospect of a bargain as the sellers are very motivated to sell at whatever the best price is that they can get on the day.

Some of the properties that are sold at auction would be difficult or even impossible to sell otherwise. These are usually properties in a bad state of repair which may not be mortgageable but, if you are lucky, can just be in need of a cosmetic update. The typical owner/occupier house purchaser wants somewhere ready to move into without having to undertake work.

Caution must be exercised, though, as there may be more serious problems with a property being sold at auction. Subsidence is a serious and structural problem that may be difficult and expensive to remedy. If the property has been converted or extended, it is important to find out whether the appropriate planning permission and building approval was obtained before the work was carried out. It can be complicated to get this retrospectively and it is possible that anything built without permission will have to be torn down.

When it comes to buying property at auction, although the savings can be great, the importance of a survey and researching the property cannot be ignored or you could end up making a very expensive mistake.