First time buyers
Buying a House at Auction: A Guide for First-Time Buyers
There are many reasons why people buy properties at auction in the UK. Firstly, they’re quick and efficient, unlike many estate agent property purchases. In addition to this, there is transparency among sellers and buyers, and the opportunity to snag a great deal. The auction process is often fairer too, because sales aren’t made on a ‘first-come-first-served’ basis.
Yes! Just because it is your very first property purchase, it doesn’t mean you can’t purchase through an auction. Auctions can save home buyers a lot of hassle and money because of the predictability of the process.
The first thing to do if you’re a first-time buyer and are considering purchasing a property through an auction is to make sure that it’s the right option for you. Buying a house at auction has numerous benefits, and can be a great way to get on the property ladder.
However, you will need to do your research on whether it is the best option for you. For example, your ability to use government assistance such as Help to Buy benefits may be impacted when you purchase at auction.
If you’ve decided that buying a house at auction is the right thing for you, the next step is to educate yourself on how the auction process works. At Real Auction, we have a number of resources available to buyers and sellers designed to make sure you’re knowledgeable about the process before attending an auction for the first time.
We can guide you through the process of viewing properties, submitting bids and getting paperwork together to make the buying experience as smooth as possible. You may want to attend an auction as a spectator first to get a feel for the process and the atmosphere.
Most first-time buyers require a mortgage to assist them onto the property ladder. As with purchasing a property through an estate agent, it is a good idea to begin this process as soon as possible. This will give you an idea of your budget and any timeframe restrictions.
Most of the time, once the hammer falls at auction the buyers have 28 days to complete the purchase. This means that all the funding needs to be in place before you submit any bids. It is also wise at this point to consider funding options. Some properties that are sold at auction are un-mortgageable, so you’ll need to bear this in mind.
Once you’re sure of your budget, you can start to take a look at auction properties available in your area and attend some viewings! Most auction houses, including Real Auction, organise open house events for prospective buyers. During these events a member of the team will be on hand to answer questions about the property and the buying process.
If you spot a property that you want to bid on, then it may be best to view it multiple times. You’ll also need to organise professional opinions on the value and condition of the property.
When properties are listed for auction, they are listed with legal packs that provide the finer detail about the property and the purchase. Before deciding on your top bid, you’ll need to instruct a solicitor to go over the legal pack to make sure everything is as you would expect.
They will be able to advise you on any problems with the documentation, and their advice, along with the advice of other professionals, will inform your decision about your maximum bid for the property.
Once you’ve decided on the maximum bid, and you’re confident in your funding, it’s time to prepare for auction day. Real Auction hosts many auctions, both online and in-person, up and down the country.
If you’re successful in bidding on the property then you’ll need to pay a deposit upfront on the day. This deposit is usually 10% of the purchase price, and will be paid to the seller.
Buying a house at auction can often be an emotionally-charged event, with a mixture of home-buyers and investors bidding on properties. Some buyers will be experienced, and some won’t be. It can be easy to be swept up in the emotion of the day, especially as a first-time buyer.
All the research leading up to this point can mean that buyers become attached to the property they are bidding on. This makes it tempting to bid above your maximum bid on the day. Make sure you’re emotionally prepared so that you don’t agree to buy a property you can’t afford!
Real Auction makes buying a property simple, transparent, and efficient with no hidden surprises. Whether you are seeking a new home, investment project, commercial property, or land we have thousands of options to choose from. Our platform facilitates the entire buying process from online viewings to bidding and buying. You can search for future property auctions on our website or by contacting our team.