Auction purchases – flourishing during the recession
Going once, going twice, sold! What can be more exciting than buying a property at auction?
This is a question that you might now be able to ask an increasing number of your friends and colleagues, as buying a property at auction becomes less and less the preserve of the seasoned investor, and a more accepted way of buying an investment property or even a home to live in.
The current recession means that auction houses have never been busier. Not only are auctions the typical way of selling the repossessed property that we have all heard so much about, but properties that may have other problems that may make them difficult to sell are also ideally suited to this type of sale.
Whilst it is by no means the case that all properties listed in an auction catalogue are these “problem” properties, buyers should be aware that within the auction catalogue will be a number of properties with physical defects, defective titles or an otherwise questionable history that may put off a purchaser who has properly researched the property.
The trick therefore if you are considering an auction purchase is to make absolutely sure that you understand what you are buying and also make sure that you financially in a position to complete on the contract date.
Here are some does and don’ts of auction purchase:
Do seriously consider asking a solicitor to review the auction pack prior to the auction. For a modest fee the solicitor will be able to identify defects in title documentation, leases, and issues on the searches. If these problems are identified after the hammer falls it will be too late.
Don’t take a chance on the structural condition of the property. Either in an auction or on a conventional sale, the seller never provides any warranty about the condition of the property. Have the condition checked out before the auction date.
Do make sure that your financial arrangements are sound and in place. Completion is usually due four weeks after the auction date, which in the current financial climate gives a purchaser very little time to arrange their finance.
Auctions are not for the faint hearted, but if done properly buying at auction gives you a change to pick up a real bargain. If you are interested in forthcoming auctions in your area or further afield then visit www.eigroup.co.uk, an information service listing nearly every auction taking place in the UK.
This article was written for and first published in the Wimbledon Time & Leisure Magazine.