What You Need to Know Before Going to a Property Auction
Author: Parmdeep Vadesha
Auctions are no longer reserved for investors out to
purchase property for the purpose of reselling it for a
profit. In recent years, more and more people are using
property auctions as a method of finding homes to buy and
live in.
The main lure of property auctions is the price. Auction
property is generally a bargain compared to those purchased
through a selling agent. The bidding system is transparent,
as you'll know for sure the amount that other bidders are
offering. Furthermore, the auctioned property can be yours
immediately - usually about 28 days after the sale.
To locate properties up for auction, locate the auctioneers
in your area and sign up to be on their mailing list.
Auctioneers usually send catalogues or online information
regarding the properties for sale in your area. A good
catalogue contains the basic information such as the floor
plan, the guide price and a photo of the property.
Since the prices of auction properties are often well below
market value, it is easy to get all excited and want to buy
it right away. However, hold your horses and first get a
survey conducted. A surveyor will conduct a home buyer's
report which will assess and point out potential problems
you may have on the property. If the property seems like it
needs some major work done, then get an estimate from your
local builder, electrician or plumber. Dirt cheap
properties often have the caveat of entailing expensive
repairs. Factor in the cost of renovation to the price you
are willing to bid. Though most auctioneers will provide a
seller's pack which contains a survey, valuation and other
information on the property, you might still want to get
your own surveyor - just to be on the safe side.
Before going to an auction, make sure you have enough cash
for the property's requirements. This is important because
a sale becomes legally binding immediately. Once a bid is
won, the buyer will usually need to make a 10% deposit
immediately and pay the remaining balance 28 days after the
day of the sale. Therefore, do not go to an auction to bid
if you do not have cash ready or if you do not have a firm
mortgage arrangement. For this reason, first-time home
buyers should think twice about purchasing at an auction
considering that most of these properties will require
extensive renovation work and a large upfront cash
investment.
As they always say in property investment, fall in love
with the deal and not with the property. Take account of
all costs and expenses involved in deciding on your maximum
bid such as solicitor's fees, arrangement fees to the
mortgage broker, valuation and survey fees, building
insurance, moving costs and the expenses incurred in
selling your previous home or property. Remember that the
reason for purchasing a property at an auction is to get a
bargain, and not to spend more than necessary. Thus, factor
in the other considerations such as the amount of deposit
you can afford, the true market value of the property and
the cost of repairs and improvements.
With these tips in mind, you are all set to embark on your
first auction and come out of it with a bargain.
About the Author:
Parmdeep Vadesha is a property investment expert and
founder of the largest community of property entrepreneurs
on the web who buy below market value properties from
distressed homeowners facing repossession, divorce and
bankruptcy. He writes a monthly newsletter for over 70,000
property investors worldwide -
http://www.Property-System.com
Author: Parmdeep Vadesha
Auctions are no longer reserved for investors out to
purchase property for the purpose of reselling it for a
profit. In recent years, more and more people are using
property auctions as a method of finding homes to buy and
live in.
The main lure of property auctions is the price. Auction
property is generally a bargain compared to those purchased
through a selling agent. The bidding system is transparent,
as you'll know for sure the amount that other bidders are
offering. Furthermore, the auctioned property can be yours
immediately - usually about 28 days after the sale.
To locate properties up for auction, locate the auctioneers
in your area and sign up to be on their mailing list.
Auctioneers usually send catalogues or online information
regarding the properties for sale in your area. A good
catalogue contains the basic information such as the floor
plan, the guide price and a photo of the property.
Since the prices of auction properties are often well below
market value, it is easy to get all excited and want to buy
it right away. However, hold your horses and first get a
survey conducted. A surveyor will conduct a home buyer's
report which will assess and point out potential problems
you may have on the property. If the property seems like it
needs some major work done, then get an estimate from your
local builder, electrician or plumber. Dirt cheap
properties often have the caveat of entailing expensive
repairs. Factor in the cost of renovation to the price you
are willing to bid. Though most auctioneers will provide a
seller's pack which contains a survey, valuation and other
information on the property, you might still want to get
your own surveyor - just to be on the safe side.
Before going to an auction, make sure you have enough cash
for the property's requirements. This is important because
a sale becomes legally binding immediately. Once a bid is
won, the buyer will usually need to make a 10% deposit
immediately and pay the remaining balance 28 days after the
day of the sale. Therefore, do not go to an auction to bid
if you do not have cash ready or if you do not have a firm
mortgage arrangement. For this reason, first-time home
buyers should think twice about purchasing at an auction
considering that most of these properties will require
extensive renovation work and a large upfront cash
investment.
As they always say in property investment, fall in love
with the deal and not with the property. Take account of
all costs and expenses involved in deciding on your maximum
bid such as solicitor's fees, arrangement fees to the
mortgage broker, valuation and survey fees, building
insurance, moving costs and the expenses incurred in
selling your previous home or property. Remember that the
reason for purchasing a property at an auction is to get a
bargain, and not to spend more than necessary. Thus, factor
in the other considerations such as the amount of deposit
you can afford, the true market value of the property and
the cost of repairs and improvements.
With these tips in mind, you are all set to embark on your
first auction and come out of it with a bargain.
About the Author:
Parmdeep Vadesha is a property investment expert and
founder of the largest community of property entrepreneurs
on the web who buy below market value properties from
distressed homeowners facing repossession, divorce and
bankruptcy. He writes a monthly newsletter for over 70,000
property investors worldwide -
http://www.Property-System.com
