Why Buy At Auction?
Some good reasons to buy at auction:
* Bargains to be had!
* Final Price - A good indicator of true value.
* Interest - If the level of interest is low, you could buy at a really discounted price.
* Information - The information on the property is more detailed. All the searches, contracts and preliminary enquiries have all been made.
* Signed sealed on the day - No more wondering whether you have got the property or not.
* Excitement - The buzz - There is nothing like fighting to get what you want and winning the day.
Property Auctions
Market Oracle recently predicted a 36% slump in property sales which was expected to last throughout 2009. These statistics are interesting because they`re being disputed by some local estate agents who are seeing a rise in sales. While the decline trend is purportedly set to continue, some happy savers are deciding that now is actually a good time to buy. It may not be a good time to sell though.
The markets are being flooded with repossessions and second homes which can no longer be afforded by their owners. This makes for a lot of competition. Those wanting a quick sale often turn to property auctions as the answer.
However, buying property at auction is very different to walking in to an estate agent, arranging a viewing and making a purchase. So in this article we`ll explore the process and the pros and cons.
How Auctions Work
You`ll find auctions advertised by estate agents, newspapers and on the internet. Sometimes people can save a third on the price of a property by buying it at auction. Typically, houses and flats put up for auction need a lot of work, but if you`re willing to renovate your new home they can be a worthwhile investment.
Prospective buyers can get an auction program which shows all of the properties up for auction on any given day. If you get a program in advance you might be able to have a sneaky look at the property in person and assess how much you`d be willing to pay for it. Sometimes internal viewings can also be arranged prior to an auction.
You would bid when your preferred lot came up and if your bid was the highest at the strike of the auctioneer`s hammer you would be legally obligated to buy the property. You would then need to pay the auctioneer 10% of the property`s `at auction` value.
You would also need to contact your solicitor so they could begin making the property lawfully yours. The process from here on in is a lot like buying a home through an estate agent, although you could find it quicker. There is never an onward chain, there`s no need for a property valuation (the auction acted in its place) and no matter how glorious or dilapidated the building you have bought is it`s yours; warts and all.
Pros and Cons
A good thing about auctions is that you could save up to a third on the true value of a property. Auctions are quick and efficient; the process starts at the fall of a hammer. There are pitfalls though; you can`t bid without a firm mortgage offer unless you`re a cash buyer.
So you may need money for a full structural survey and legal enquires to ensure you will be sole owner after the auction. After all this, your bid could still be unsuccessful. Still, though, auctions are a great way to get bargains on property in Durham and other popular UK cities.
