5 auction pitfalls and how to avoid them

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    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.

     

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