Buying a home at an auction can be an exciting way to get a property at a lower price. However, it is very different from buying a home the usual way. There is less time to make decisions, and once you win the bid, you must complete the purchase quickly. Estate agents in Portslade can offer guidance on finding the right auction properties and understanding the process.
If you are new to property auctions, this guide will help you understand how the process works and what you need to do before, during, and after the auction.
What is a Property Auction?
A property auction is a public event where homes are sold to the highest bidder. It can be held in a room with people bidding in person or online. Instead of negotiating with a seller, buyers compete against each other by making bids. The person who makes the highest bid wins the property.
Once the auction ends, the buyer must pay a deposit immediately and complete the purchase within a set time, usually 28 days.
Why Buy a Home at Auction?
Buying a property at auction has several benefits:
- Lower Prices – Some properties sell for less than market value.
- Fast Process – The sale is completed much quicker than a normal house purchase.
- Fair and Transparent – Everyone can see the bids, and there is no long negotiation process.
- Unique Properties – Auctions often have properties that are not available on the open market.
However, there are also risks, so it is important to do your research before bidding.
Step 1: Find a Property Auction
The first step is to find property auctions happening near you. Auction houses list upcoming sales on their websites, and estate agents in Portslade can also help you find auction properties in your area.
Most auction houses publish a catalogue before the auction. This contains details of all the properties for sale, including their location, condition, and guide price.
Step 2: Research the Property
Once you find a property you like, you must research it properly. Unlike a regular home purchase, you cannot back out after the auction, so you need to be sure before bidding.
- View the Property – Always visit the property to check its condition. Some auction homes need repairs, so look for any problems that might cost money to fix.
- Check the Guide Price – The price listed in the auction catalogue is only a guide. The final selling price may be much higher.
- Read the Legal Pack – The auction house provides legal documents for each property. A solicitor can check these for any hidden issues, such as debts on the property.
Step 3: Arrange Your Finances
When you buy a home at auction, you must pay a deposit as soon as the auction ends. This is usually 10% of the purchase price. The rest must be paid within 28 days, so you need to have your finances ready before you bid.
If you need a mortgage, talk to a lender before the auction and get a mortgage in principle. Some properties, especially those in poor condition, may not qualify for a mortgage, so check this first.
Step 4: Attend the Auction and Bid
On auction day, arrive early or log in if it is an online auction. Make sure you:
- Set a Budget – Decide the maximum amount you are willing to pay and stick to it.
- Register to Bid – You may need to sign up before you can make bids.
- Stay Calm – Auctions move quickly, so focus and avoid bidding more than you can afford.
If your bid wins, you will need to pay the deposit immediately and sign a contract to complete the sale within the agreed time.
Step 5: Complete the Purchase
After winning the auction, you must:
- Pay the Remaining Amount – You have around 28 days to pay the full price.
- Arrange a Solicitor – Your solicitor will complete the legal paperwork.
- Collect the Keys – Once the sale is complete, you can move into your new home or start any necessary repairs.
If you fail to pay the full amount within the time limit, you may lose your deposit and the property.
Things to Watch Out For
Buying a home at auction can be a great way to get a bargain, but there are risks. Some things to be aware of include:
- Hidden Costs – Some properties may need expensive repairs. Always check before bidding.
- No Refunds – If you change your mind after winning, you will lose your deposit.
- Competition – Many people bid at auctions, so prices can rise quickly.
If you are unsure, getting advice from estate agents in Portslade or a property expert can help you make a smart decision.
Final Thoughts
Buying a home at auction is an exciting way to secure a property quickly and sometimes at a lower price. However, it is important to do your research, arrange finances in advance, and set a budget to avoid overbidding.
With careful planning, you can find a great home or investment property at an auction. If you need help finding auction properties or understanding the process, estate agents in Portslade can guide you through your options.