Buying a property through an auction can be a great way to get a good deal on a property, but it is important to understand the process before committing. The first step in any auction purchase is to register with the auction company and arrange viewings of the property you are interested in bidding on. Having a mortgage in principle already in place can make the process a lot smoother, especially if you are planning to buy with a loan.

Online Auction

You will have access to a link which will take you to the website to start your bidding journey, you are able to see other people's bids and you can bid as many times as you want to. The online auction process usually lasts 21 days and bidding can go on for the whole 3 weeks, on the last day of the auction, people can bid right up until the very last second.

If you are unsure of how this works you can contact the auction company and ask them to explain the process to you so that you are fully aware of what's involved. If you choose to use an online only property auction which is a modern method used, then you will be best speaking to the auction company or the estate agent advertising the property, for additional information if needed.

Auction House

When attending an auction house in person, be aware of the rules and regulations that will apply on the day. Before bidding at any auction, it is essential to have already completed any due diligence such as surveys or searches and obtained your mortgage finance, as you may be unable to get out of the contract once you have made a successful bid. Be sure to stay within your budget and if your bid is successful, it will be essential to organise all the necessary paperwork quickly.

Additional auction costs

If you are successful in the bidding stage, you may need to pay 10% of the sale price on the day as a deposit. The remaining 90% must be paid within 28 days otherwise, you could lose both the property and your deposit. An administration fee to the auction house is usually between £200 and £300.

If your bid is successful, you’ll usually have to pay:

• 10% of the sale price on the day, as a deposit
• 1% - 6% in auction fees
• The remaining 90% around 28 days later – if you don’t pay this you’ll lose the deposit and the property
• An administration fee to the auction house – usually between £200 and £300
• Stamp Duty Land Tax
• Conveyancing solicitor fees
• Survey costs
• Buildings insurance

Finally, at any type of auction, it is important to remember that the auctioneer has the right to accept or reject any bid. If your bid is unsuccessful, you may still be able to make a private offer afterwards, however there will be no guaranteed that this will be accepted by the seller. Therefore it is important to go into an auction with realistic expectations and understand the risks involved.

If you are interested in a property at auction and looking to purchase it with a mortgage contact us today at 0151 662 0188 or email [email protected]