Most of us buy our home through a process known as private treaty. This means that, in England and Wales at least, we search a specific area for a suitable home and once we’ve found the place of our dreams we make an offer to buy via the selling agent.
An alternative way to buy is the public auction. Buying at auction can be fun but you need to know what you are doing if you aren't to make some very costly mistakes. First of all, it's worth understanding how buying at auction differs from buying by way of private treaty.
In simple terms, if you bid for a property at auction you should know the following;
For these reasons buying at auction is normally the domain of the more experienced cash buyer; but not exclusively. It's not unusual for property that forms part of a deceased estate or property being sold by a mortgagee in possession (repossessed property) to be sold at auction.
If you decide to bid at auction there are some lenders that are happy to work with you. This might even include offering a bridging loan (a short term loan which will be repaid by a longer term mortgage a few weeks or months after you have completed on the purchase). The availability of bridging loans will depend largely on how large a deposit you have and how appealing a credit risk you are to the lender. It’s sometimes necessary to arrange a bridging loan when you still have another property to sell.
In order to have the best chance of successfully buying a property at auction there are some things you can do.
They are;
Auctions are still a great place to secure a bargain, but beware. They are full of professionals and if you are new to the game, it can be a scary place to buy the most expensive asset you may ever own.
For more information contact us or speak to a mortgage adviser on 01628 507477.
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