Auction properties are a good potential hunting ground if you’re seeking a deal. There are, however, a number of key considerations. We briefly explore the pros and cons you’ll want to consider when buying an auction property.
Pro: Property chains cannot collapse
One key benefit of buying a property at an auction is that, as soon as you win, the property is yours. There are no additional factors to the exchange process that may see it fall through, such as long chains with multiple potential points of failure. Auction properties also tend to be significantly cheaper than conventionally purchased homes. In some circumstances, this may even mean that you will be able to finance your new property outright rather than with a mortgage.
Con: Auctions can be extremely competitive
By their very nature, auctions are competitive. A popular property in a good area can easily command high prices, making it less affordable than you’d perhaps hoped for. Auctions are generally also widely advertised, meaning there is no real way of getting a quick deal before others find out about your chosen property. With that said, you may just get lucky and secure a hidden gem.
Pro: You may find the bargain of a lifetime
As we mentioned above, auction properties are well known for being attractively priced . sometimes. If you’re in the right place at the right time, you may just get the perfect property for you for an excellent price. Bear in mind that you’ll still need to have all of the funds and, where possible, a pre-approved mortgage ready to buy your dream home. An experienced conveyancing solicitor such as Parachute Law can advise you.
Con: You might overpay on your home
Since you cannot really know in advance just how interested others may be in your dream property, you may end up overpaying. With that said, the same can easily happen when you are making offers during a conventional property search. In practice, you’ll rarely find out by how much you overbid versus what others were willing to pay. Provided that you feel you got a good deal and the purchase price is in line with the valuation of comparable properties, all should be well.
Pro: You may get a bargain in a dream area
Premium priced areas such as Berkshire or London may become accessible for buyers looking to purchase via property auction. Ascot solicitors and those elsewhere can assist with any queries you may have about local property auctions, helping you secure the home of your dreams for a reasonable price. Many buyers have found a dream property via auction that would otherwise have been out of reach.
Con: A greater degree of renovation may be required
Many auction properties require significant renovation. Whilst this is entirely in the range of many buyers, it may have an effect on the valuation and any mortgage you may require.
In summary, there is the potential for a great deal, but property auctions can be competitive and inexperienced buyers may overbid. Thorough research and preparation, in particular, arranging the required finance to support the fast completion required by an auction purchase, is essential. However, with some determination and the right preparation, you may very well secure the property of your dreams.
