Buying at an auction is a well established route for those looking for their perfect property due to the benefits and accessibility that the process offers, namely the security and speed. Gone are the days where auctions are thought to be for the experienced investor looking for their next renovation project.
We've partnered with Iamsold who offer both traditional and modern methods of selling your property at auction. Below are just some of the advantages of using their auction services or you can find out more here about buying a property at an auction.
Modern method of auction
56 day completion
These fixed, realistic timescales are set from the start to ensure the process runs as quickly and smoothly as possible. On average, Iamsold's completion rate is 44 days, compared to 126 days for private treaty sales*.
Once the hammer falls the buyer and seller enter into a reservation agreement which commits them to complete on the transaction. This reduces the risk to both parties of the sale not proceeding to complete. With private treaty (open market) transactions, on average 70% break down leaving buyers and sellers with frustration and costs to pay**.
Buy with a mortgage
Due to the 56 day completion timescale with the modern method, it's accessible to buyers who need time to organise their finances and arrange a mortgage on the property.
Buyers information pack
Iamsold provide a buyers information pack which includes a collection of documents to help you make an informed decision on your purchase before proceeding. This is only for guidance so a bit of your own research will also help. Buyers should seek advice on anything you are not sure on before placing a bid.
Iamsold's platform allows you to bid on any property 24 hours a day, 7 days a week - you can do this by going online or by phone.
28 day completion
As soon as the auction ends the exchange of contracts will take place with the buyer and seller, where you'll have 28 days to complete the transaction. It's key that your funds are readily available to pay the deposit, fees and purchase price.
Just like the modern method, the exchange of contracts takes place straight away and completion 28 days thereafter.
Buyers information pack
The buyers information pack detailed above is also provided with the traditional auction.
Live auction events
Live auctions take place nationally and they allow you to bid on a property in person at an organised event. Alternatively you can bid by phone or form proxy.
* and ** source: Iamsold
Things to consider
A large deposit is required
When buying at auction you may have to pay a large deposit, normally 10% of the purchase price. At this point you will sign an agreement which secures you the property. The remaining 90% is normally paid within 30 days.
Whilst a quick purchase may seem like a great idea on paper, you may come into difficulties trying to get a surveyor on site when you have such a short deadline or your solicitors might not be able to work to your timings.
Keep within budget
Bidding for a property at an auction is very exciting however try to keep a level head when it comes to your finances. Set limitations, stick to your budget and try not to get emotionally invested in the property. Bear in mind the higher the bidding goes, a larger deposit is required.
A lot of sellers still use the traditional way of putting their house on the market by using an estate agent. Always check out selling sites - you could grab yourself a bargain from the properties that are already out there.
You will need your finances in order to purchase at an auction; either as cash or an agreement in principle from a lender. If you would like help with finding a mortgage prior to bidding on an auction site, talk to an expert Nottingham Mortgage Services adviser. They'll search mortgages from over 60 different lenders to find the right deal for you.