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PROPERTY LADDER
Property Ladder: Your Questions Answered, Part 2
You have been emailing us with queries on all aspects of renovation and property development. Some topics seem to crop up again and again, so here are the answers to some of your most common problems.
The great thing about buying property at auction is that once the hammer falls, you’ve entered into a legally binding contract, so you won’t be gazumped or messed around by the vendor. But this does mean that you won’t be able to change your mind and pull out of the sale, so it’s vital to do your homework and obtain as much information as possible about the property beforehand.
Properties tend to be auctioned for a variety of reasons. Many are repossessions or executors’ sales, whereas others may be difficult to sell because they have suffered fire damage, are badly converted, subject to restrictive covenants, have problems with their leases or are extremely quirky. And although there aren’t as many bargains as there used to be, you can still pick up a property at well below market value.
Start by researching the market carefully, so you know what properties are going for locally, and once you’ve made up your mind to buy at an auction, sit in on a couple before you have a go yourself, so you know what to expect. There are several ways to find out about auctions in your area. Register with www.auctionpropertyforsale.co.uk, or visit the auctions section in the National Association of Estate Agents’ website, www.naea.co.uk. For the most comprehensive auctions listings, it’s worth subscribing to the Essential Information Group’s site www.eigroup.co.uk, which has details of every property coming up for auction in the UK.
Most auction houses release details of properties about a month before the auction, so request a catalogue, pick out properties you are interested in, and arrange viewings. It’s best to take a builder or chartered surveyor with you, to give you an idea of how much work is required, and how much you’ll have to spend.
Ask the auction house for a legal pack, which costs around £20. This contains the HIP and includes copies of searches and anything affecting the title to the property. Get your solicitor to go through this carefully, and if it still appeals, tell the auction house that you’re interested in it, so that they can let you know of any changes that may affect you - for example, if another purchaser makes a bid before the auction.
On the day of the auction, you’ll need to have your finances in place, so make sure any mortgage is agreed in principle. A 10 per cent deposit will be payable immediately, with the balance due 28 days later. Set yourself a ceiling price and don’t bid above it, however tempting, as there will be plenty more properties coming up for auction if you don’t get the one you want first time.
For more information on buying at auction, check out our guide here.
