You'd be mad not to have all searches and legal enquiries completed before bidding, so you need to plan ahead. You should never bid for a property at auction if your purchase will only be enabled by the sale of your own property.
As the successful bidder, you have to pay a 10% deposit immediately. You'll need the finances with you, and must be in a position to pay the remainder within 28 days.
If you renege on the deal, you lose your deposit. If the property is offered for sale again and reaches a lower price than when you bought it, you may even be sued for the difference.
It's easy to get caught up in a bidding war. Remember your maximum limit and stick to it. Bear in mind you'll have solicitors' and surveyors' fees, possibly stamp duty and the cost of any repair work which may be needed, as well as the auctioneer's fee. Bear in mind, too, that on signing the contract you'll be responsible for insuring the property.
Properties can sometimes sell prior to auction. Check with the auctioneer to confirm that the lot in which you are interested is still being offered.
Remember that a property auction isn't something you wander into on a whim - unless you're a millionaire with a spare afternoon and a small fortune burning a hole in your pocket. You should be well prepared in advance. It's essential to obtain a copy of the auction catalogue from the auctioneers, which may have important information about the property within it.
You should visit the property yourself, get a report on the building from a surveyor and instruct your solicitor to run all the usual searches and look into anything that might affect the price or future value of the property, just as you would with any property purchase. And you should ensure that you have their reports back well in advance of the auction if you are thinking of proceeding. Once you've done all that and everything seems satisfactory, then - and only then - are you ready to bid.
The views represented in this article are those of the author and not of Channel 4. The purpose of the article is to provide general information only and does not constitute financial, investment, legal or other advice.You should not rely on any information provided in this article and you should always seek out independent professional advice relevant to your own particular circumstances.
