A Quick and Easy Guide to Property Auctions in the UK
Parmdeep Vadesha
September 26, 2008
Property auctions are one of the best ways to score a bargain property. In the United Kingdom, thousands of properties are sold each year at an auction. With house prices stabilising, it is much easier to purchase a property at an affordable price. But good news for investors – a prime property at a price well below market value is always available at a property auction.
Property has always been a good long term investment. For many would be property investors however, deciding to get their foot on the property ladder is daunting. For a first timer with not a whole lot of money to invest, it is always a good idea to stay on the cautious side. That is why auctions are often a good place to start. If you play your cards right, you could walk out of the auction house with a property that you bought for a price that is often 10% to 30% below market value. A good way to start off your property portfolio once you have the knowledge behind you and guidance from experienced investors.
With the current credit crunch and high interest rates, many homes unfortunately end up repossessed by the banks and lending institutions. While this is truly sad news for the homeowner, repossessed properties are a wise purchase for the property investor. Banks and creditors often want to get rid of the property right away so they can recoup their investment. Thus, repossessions are usually sold cheap via an auction. In fact, repossessed properties often occupy a huge chunk of the auction house´s property portfolio. The good part about repossessed properties is that not only are they priced cheaper than most but many of them are in good condition too.
The traditional notion is that property auctions are not for beginners. While the auction process can be daunting and complex for the first timer, there are ways to make the whole process uncomplicated. For starters, bring along someone who has prior experience with property auctions and who knows the ins and outs of bidding. Make sure your companion is a person you trust and whose advice you believe in.
More importantly, do some research prior to the auction date. Of course, you have to know the area and the neighbourhood that you are buying into. Know the prevailing market prices of similar properties in the area. Do an ocular inspection of the property, and keep a keen eye out for potential structural problems that might be hidden in nooks and crannies. Make sure that you have not only fallen in love with the property, but that you are also happy with the deal that you are getting.
Having done all the preparatory work and found experienced mentors, you are pretty much all set and ready to go. Who knows, you just might walk out with a plum property at a very good price at a property auction. And for a last piece of advice – bid with your head and not with your heart. You want to end up with an investment that is saleable and profitable, not with an overpriced lemon.
Property has always been a good long term investment. For many would be property investors however, deciding to get their foot on the property ladder is daunting. For a first timer with not a whole lot of money to invest, it is always a good idea to stay on the cautious side. That is why auctions are often a good place to start. If you play your cards right, you could walk out of the auction house with a property that you bought for a price that is often 10% to 30% below market value. A good way to start off your property portfolio once you have the knowledge behind you and guidance from experienced investors.
With the current credit crunch and high interest rates, many homes unfortunately end up repossessed by the banks and lending institutions. While this is truly sad news for the homeowner, repossessed properties are a wise purchase for the property investor. Banks and creditors often want to get rid of the property right away so they can recoup their investment. Thus, repossessions are usually sold cheap via an auction. In fact, repossessed properties often occupy a huge chunk of the auction house´s property portfolio. The good part about repossessed properties is that not only are they priced cheaper than most but many of them are in good condition too.
The traditional notion is that property auctions are not for beginners. While the auction process can be daunting and complex for the first timer, there are ways to make the whole process uncomplicated. For starters, bring along someone who has prior experience with property auctions and who knows the ins and outs of bidding. Make sure your companion is a person you trust and whose advice you believe in.
More importantly, do some research prior to the auction date. Of course, you have to know the area and the neighbourhood that you are buying into. Know the prevailing market prices of similar properties in the area. Do an ocular inspection of the property, and keep a keen eye out for potential structural problems that might be hidden in nooks and crannies. Make sure that you have not only fallen in love with the property, but that you are also happy with the deal that you are getting.
Having done all the preparatory work and found experienced mentors, you are pretty much all set and ready to go. Who knows, you just might walk out with a plum property at a very good price at a property auction. And for a last piece of advice – bid with your head and not with your heart. You want to end up with an investment that is saleable and profitable, not with an overpriced lemon.
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