Buying at Auction

[Playgrind]

Our budget is small for the area as we need 3 beds (3 kids so cant manage with fewer).

I'm noticing a number of Suitable properties going to auction. They look in good condition as far as I can tell from photos, but obvs would need to get a survey done.

Auction feels risky for us as FTBs, but little else coming up in our budget.

Anyone done this? What else do we need to know/be aware of?

TIA

If you need a mortgage it can he tricky at auction. You normally have to complete within 28 days and when the hammer falls you have exchanged contracts so to get the mortgage and legals done in 28 days is tight. If you don't complete within the time limit you can lose your deposit which you will have paid straight after the hammer falls.

Hi OP, I'm a property solicitor.

Things to bear in mind:

• There should be a legal pack available to view online. Check this very carefully. I would recommend paying a solicitor to check it for you and to explain the contents to you before the auction.

• The general position is that you will exchange contracts at the point of a successful bid (therefore you can't pull out afterwards without very costly penalties). This is why fully understanding the legal pack and having a survey etc in advance is important.

• The legal pack should tell you the completion timescale, which is often 4 weeks from the date of the auction. If you're reliant on mortgage finance, you should bear this timescale in mind because if you don't get your mortgage in place in time, you could be in breach of your contract and at risk of losing your deposit (and potentially other costly penalties). Do not bid on a property unless you're 100% certain that you will have the finances in place on time for completion.

I hope this helps. Happy to answer any other questions if I can!

Watch out for last minute changes, I know of one unscrupulous trader, who always the day or two before the auction, switches so the buyer has to pay the sales fees and his legal costs...

Also the guide prices are generally much lower than the reserve to get people interested.

Thanks all, that's really helpful.

I notice the timeframe for exchange has been extended to 56 days in the auction house I looked at but think its still too risky for us if anything went wrong.

That wasn't true when I was looking at auctions earlier this year. Many weren't selling, or they were going at Guide Price.

However, there is always a reason why they're selling at auction rather than the traditional way. It's often properties with structural or legal issues, or unmortgageable for some reason.

Also look at the estate agents wording carefully. There’s traditional auction and modern auction. Modem auctions seem to involve paying a non refundable fee. Tbh I didn’t go any further as decided it looked too risky for me.