Buying property at auction: what you need to know

With the advent of technology that allows people to buy online, as well as experiencing auction formats on various dedicated websites, the fascinating world of buying at auction has changed in the last ten or twenty years. 

The proliferation of auction-based television programmes and the success of the BBC's property renovation show, Homes Under the Hammer, have given prospective buyers a greater understanding about what is involved in purchasing a property at an auction.

In addition, the traditional methods for buying a home, such as going through an estate agent, are slowly changing and property purchase via an auction is gaining greater traction in buyers' imaginations.

When you buy at a property auction, there are several differences from the standard agent-driven purchases: the first obvious distinction is that, once your bid is accepted as the winner, you will almost certainly be required to exchange contracts there and then, with a set elapse time (usually 28 days) before you must complete on that contract, as well as needing to pay a deposit (usually around the 10% mark).

In the standard way of doing things, you'd book an appointment to view the property, assessing your thoughts of what you want to offer for it against the asking price and, if it is accepted, start the lengthy process of lining up your conveyancing solicitor and surveyor to investigate the property and the seller, as well as lining up the funds with which to buy the property and enter into the potentially long chain before you get anywhere near exchanging the contracts.

With an auction, all of that is done up front.

The auctioneer will provide the Legal Pack on request, which includes the results of the standard property searches, the title deeds and conveyancing forms filled in by the seller (the Fixtures and Fittings and the Property Information forms being the most familiar).

At the same time, you will need to make an appointment to make a viewing of the property. This is an essential step so that you can get your impressions of the home and how it might fit your needs, and how much work you envisage might be required to bring it up to your expectations.

You should then appoint conveyancing solicitor and surveyor, the latter to provide an expert analysis of the issues they have identified, a summary of the estimated cost to fix the problems they have found and a professional valuation of the property as it is in its current state.

While it is generally thought that people who buy at auction are those with lots of free money to hand, there are lenders who will provide loans for those wanting to buy at auction. You should consider talking to a mortgage expert and, when you find a lender suitable to your purposes, obtain a Mortgage in Principle document, which will help you to limit what your highest bid will be.

Finally, based on all the information you have received, including the cost of fixing problems found in the survey, and the fundamental of how much you can afford, be prepared to walk away if the bidding gets too high. If you go over and your bid is accepted, you'll forego your deposit, if you are unable to afford the eventual bid price.

It's important to get as detailed a survey as possible on the property, which will look into all aspects of the property, highlighting points of concern for your conveyancer as well as the recommendations for remedial work, which can then be factored into your budget.

The final survey report will be presented to you using a visually-expressive traffic-light system to make the results of their investigation obvious and easy to understand:

• Green - no problems identified

• Amber - problems identified but immediate remedies not required, but will be needed in the future

• Red - significant or urgent problems requiring immediate remedial work to be carried out

Where they have identified a problem, the surveyor will also give pointers on the type of remedy required and a broad idea of the costs of rectification. All this information can then be used by you to either back out of the purchase, or to open renegotiations on the asking price to pay for part or all of the work required. 

At any time, you can talk to your surveyor about anything that is of concern to you. It's a good idea to write a list from your viewing of the property before you appoint them so that the surveyor can focus particular attention on the items to either confirm your suspicions or allay your concerns.

The bottom line is that the survey report will give that peace of mind that you know what you are investing in for the future - or it'll give you that level of certainty to walk away from the property if the bidding becomes too rich for your budget and the constraints of any loan you've set up.

Have you spotted a good property that you want to buy at auction? Have you looked around it and found a few areas that are concerning you?

You'll want to get a professional assessment of any existing problems and what the remedial effort and cost will be with a RICS Level 3 Survey. 

At Surveyor Local we only work with chartered surveyors who are members of the Royal Institution of Chartered Surveyors, ensuring the survey you get is always professionally delivered.

They will work hard to identify all kinds of problems, including the impact of prior flooding on the structure of the property.

That's where it is really worth contacting Surveyor Local! 

Call  to get your no-obligation survey quote started, or to discuss your concerns with the acquisition of your planned property.

Or you can get a quick quote, using Surveyor Local's easy-to-use quote generator. Simply input your name, postcode, email address, phone number and an approximate value of the property (usually the agreed price), and we'll give you an instant quote for the work (with an email copy). 

We'll do the rest once you confirm your acceptance of the quote.