Property auctions

[thecherryontop]

My husband and I have been watching property auctions for a while now as we would like to invest (we are looking in Midlands/North of England and currently live in the south east)... does anyone have experience of auctions in these areas? -The end prices look similar to online?

I buy in England at auction. I’m not sure I understand your question? It is quite transparent? Many National auctions have property lots scattered across England. Or are you referring to a more specialised local auction house? Have you been to an auction before? Do you know the areas you are buying in? Before plunging in, I’d get a feel for an auction before starting. Understand the terms used - the price for a property offered with vacant possession is somewhat different to one offered with a regulated tenancy. Compare what you hoped to pay for something vs sold prices. Also consider how you intend to fund, who’ll be doing your legal advice/conveyancing. What will you do with it once sold? If I am buying out of area and intend to renovate and either sell or let to tenants I try and forge a relationship with a local estate or letting agency to gain a realistic view of what I might hope to achieve as a return. Set a price you want to pay and walk away if it goes higher. You never know, you may be contacted if the highest bid fails. Bear in mind properties at auction are there for a reason - repossessions/ unmortagable (no bathroom or kitchen for example) or derelict (I’ve bought these) or short leases left so suit cash buyers. Or there are potential legal issues - JK/complicated conveyancing - flying freeholds etc. You need to read the auction packs very carefully ( I pay my conveyancer a fee to read the ones I want to bid on after I have read then and she provides a detailed report which influences if I go ahead and bid or not) but always remember to check there are no addendums on the day which might alter the terms upon which a lot is being offered. Don’t forget you can try and bid before auction and try and agree a sale beforehand. Sometimes you can get agreement sometimes not - I’ve bought at auction properties on the day for as much as £50k less than I offered to agree a deal before the public sale. Some you win (low turnout auction) some you lose. IME, Auctions just after a stamp duty change are a good place to start as there tends to be fewer buyers in the market. Don’t forget when the hammer goes down snd you have the winning bid, you’ll need to stump up your 10% on the day and exchange contracts on the day. You then have 30 days to complete. You can’t revise the contract. I love auctions for the certainty of the sale and as I don’t need finance it does open up what I can take a punt on. Financing an auction property is not something I have experience of but someone else might come along with some wisdom on that aspect. Consider how you’ll hold the property legally or treat revenue streams from it before you buy. Otherwise you’ll pay stamp duty twice if you change how you wish to hold it (I.e personally to a property co) Never buy anything you haven’t physically viewed and don’t believe that a la HUTH you can renovate an entire property including a rewire, new heating system, kitchen and bathroom on a budget of £1500 🤣 do your sums carefully before you bid! HTH, good luck!

Thanks for your reply, yes it's not something we've just picked up but rather have been looking at for quite sometime and thankfully have considered and know what we want to do about all the points you've raised. I probably didn't phrase my question very well... it's more of a case of the properties we have seen at auction don't seem to be going for very much cheaper than similar advertised by estate agents once the auction has ended... so in that respect is it just more the fast turnaround which is the advantage?

Hi, I’m not sure where or what you are looking at? IME with possibly the exception of the obvious ex-LEA properties (which often are at auction with unresolved or tricky conveyancing issues) or repos (which sometimes have vacant possession issues) and thus tend to look more ‘safe’ so there are more retail bidders most lots have something inherently ‘wrong’ with them. If you have been looking recently there is a bit of a inflation owing to some trying to beat the stamp duty deadline and as auctions have certainty in the deadline . As with prior years I’d wager the results for the next 6 months following March 31st will be keener. Hope that helps.

Yes I did wonder if the stamp duty had had a bigger impact on things. Thank you, you've been super helpful.