Auction houses are famous for selling trinkets, art and antique furniture; however, they are also a known route into the property ladder for homeowners, buy-to-let landlords and investors. Record figures of home buyers are turning to property auctions where they can win a bid and get locked into a home purchase within just minutes. However, this auction is not perfect for the faint hearted. It is imperative to be wiling and brave to enter a bidding war in order to get your dream property. Therefore, is it really worth purchasing a house under the hammer?
High prices of homes and increased property demand make it tougher to get a bargain. Usually, houses disappear from the real estate market quickly and a home purchase may fall through and buyers will have to start finding one again. Conventionally, the primary route to purchasing or selling a home has been to work with an agent or by using online portals and then later use an agent. But, if you are interested in learning the ropes, stick within your means.
The Kind of Properties for Sale
A lot of people relate auction homes with derelict abandoned buildings that are not desirable. But, properties are usually put up for auction for some reasons like aiming to avoid estate agent fees or to h have a better price. Also, there are organizations and individuals who prefer a quick sale. These can include institutional investors, long-term investors or public sector bodies like police authorities and councils. Auction fees are expected to be not more than 2% plus VAT. When the hammer falls, a guaranteed sale is given. Competitive bidding allows properties to get a higher price than when you listed with a real estate agent. A reserve price is agreed upon by the seller with the auctioneer.
Who Purchases There?
Property auctions are a great location for buy-to-let landlords for picking up a good deal and build their portfolio. This kind of auctions has long been famous with small developers and professionals looking for value. Also, they can be used by those who are buying properties for the first time as another way to find a house. The issue though is that when the hammer falls on the winning bid, the bidder is committed to purchase, usually within a very tight timescale. In case you have not found a buyer for your current property or haven’t lined up the finance, then you will surely have a problem.
Possible bidders can view homes before the auction day at organized open days so they can evaluate if they would wish to proceed. With this, everybody surely has the chance to sew what home they are buying before they put in a bid. Any person who wants to purchase a property also enjoys the benefits of a faster process since negotiations on offer do not involve any waiting. People just make their bid and then hope to win. Also, this means that there is no possibility of gazumping where somebody comes in with his higher offer or gazundering where a property buyer lowers his offer during the last minute.