5 auction pitfalls and tips to avoid them
1: You might get carried away and bid more than you can afford.
Tip: submit a proxy bid instead.
2: You fork out hundreds of pounds for surveys and legal advice yet you might be outbid.
Tip: to avoid this, make a private offer to the auction house BEFORE the auction, they just might be prepared to sell there and then. Remember you’ll still have to stump up a 10% deposit and complete within a short time-frame, just as if you’d bought at auction.
3: Yours is the highest bid – but the auctioneer won’t sell because it’s below the reserve price.
Tip: If the lot doesn’t meet its reserve, make an offer to the auctioneer AFTER the auction. They’ll usually indicate how much they’re prepared to flog it for.
4: You have to scramble to arrange your finances, usually within 28 days, or lose the property and your deposit.
Tip: Personally I would only buy at auction with cash to avoid the risk of finance not coming through in time as lenders usually take a lot longer than 28 days to approve loans. Try to arrange your mortgage beforehand, or at least get an offer in principle before the auction. If desperate, consider taking out a bridging loan.
5: You have to buy in a rush, meaning you might not have time to really consider your purchase and check out its potential faults, drawbacks.
Tip: Remember this mantra, buy in haste, repent at leisure.