Yesterday was the first Derby Graham Penny Auction in 2014.As usual the Professional Properties team were in attendance to what was one of the busiest yet.
We gave advice to a lot of potential buyers and picked up 5 pieces of new business so it was an excellent day!
Is buying at auction a good way of acquiring property.....?
The Fors...
No Gazumping Allowed - Bidding is open and fair and the highest bid wins! It really is that simple. Once the auctioneer's gavel falls, the sale is complete and binding. Exchange of contracts takes place there and then with, usually, a 10% deposit payable instantly.
It is Quick - The timescales involved is remarkably quick. Once exchanged, the property, in most cases, will be set for completion after 21 days.
Something Different - As I've already said, prices are usually extremely competitive and often cheaper than in the estate agents window. There is also a wider choice of property, including repossessed homes needing a quick sale and unusual properties that might otherwise prove to be difficult to sell through normal channels. This is particularly beneficial to investors who may not necessarily need to buy in the area in which they live.
The Againsts...
It's easy to get carried away! - It is so easy to get lost in the excitement! Set your maximum price and stick to it. There will be the usual property related costs; solicitors' and surveyors' fees, the auctioneer's fee and, dependant upon sale price, stamp duty. Properties can sometimes sell prior to auction. Check with the auctioneer to confirm that your property is still being offered.
Sort your Finances - The quick process of an auction purchase means that you will have to organise things that would normally take a while if buying traditionally. You need to have searches and legals completed before bidding. You will also need to have the remaining 90% completion monies available as 21 days is not long enough to get this organised!
You can't change your mind! - Once the gavel falls and you hear "SOLD", if you are the winning bidder then it's yours. You should be well prepared in advance. Scour the property details in the auction catalogue and visit the property. If renovation works are necessary, prepare a schedule of costs to ensure the deal stacks up. If you buy it and find out it backs onto a power station, there's no going back!
Lose Your Deposit - If you back out after exchange of contracts, you will lose your deposit.
It can be scary and, believe me, your heart will be racing if you are bidding. It is the most exciting way to purchase property, however, remember the golden rule...
Sort your Finances - The quick process of an auction purchase means that you will have to organise things that would normally take a while if buying traditionally. You need to have searches and legals completed before bidding. You will also need to have the remaining 90% completion monies available as 21 days is not long enough to get this organised!
You can't change your mind! - Once the gavel falls and you hear "SOLD", if you are the winning bidder then it's yours. You should be well prepared in advance. Scour the property details in the auction catalogue and visit the property. If renovation works are necessary, prepare a schedule of costs to ensure the deal stacks up. If you buy it and find out it backs onto a power station, there's no going back!
Lose Your Deposit - If you back out after exchange of contracts, you will lose your deposit.
It can be scary and, believe me, your heart will be racing if you are bidding. It is the most exciting way to purchase property, however, remember the golden rule...
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