With repossessions soaring how do you buy from auction?

Accordingly to the Council of Mortgage Lenders repossessions have soared by 48 per cent to 18,900 in the first six months of 2008, so is now the time to get a great property deal at auction? Buying a property at auction is very different from the conventional buying process. The majority of auctioned properties are repossessed houses or flats that tend to be in a state of disrepair. While there are advantages to buying at auction, there are also many things to consider. With the revival of buying at auction Primelocation.com has compiled a guide to help you through the buying process.

Be prepared - Buying a property at auction is an exciting and potentially profitable way of buying a property. It also means you can avoid the lengthy purchasing procedures, because as soon as the hammer falls, the property is yours. However, it should not be undertaken lightly, and it pays to do some research on the process to maximise your chances of getting a good deal.
Locating a property auction -First you need to find out when and where there is an auction. You can do this by scouring the property papers and magazines or by speaking to local estate agents.

Finding the right property - Once you have found an auction, you need to request a catalogue, so that you can study it and see what properties are on offer.

Viewing properties - Once you have a shortlist contact the auctioneers to arrange a viewing. Often auction properties are in a poor state, so it would be advisable to take a builder or an architect with you at this stage. They will help you decide what work needs to done and how much it is likely to cost. It is important to remember that time is of the essence with auctions. There is usually only a matter of four weeks between the publication of the auction catalogue and the auction itself, so you have to act fast.

Research the property - Compare the price and condition of the property to similar properties listed for sale with local estate agents. You will find that the guide price of auction properties is set relatively low in order to entice bidders, so decide what you think the true market value of the property is, and bid accordingly.

Legal matters -When you express an interest in a property to the auctioneers, there is usually a legal pack available. It is essential that you digest this information and if you're not sure about something, ask your solicitor. It may contain covenants or certain legalities which could have implications on the value of the property. It might even pay to carry out property and land searches of your own.

Arranging your finances - You will need to make your financial arrangements prior to auction. You must have a 10 percent deposit with you on the day, and you need to pay the remaining 90 percent within 28 days. If you need a mortgage, it is essential that this has been agreed prior to the day and that you have arranged a mortgage in principle.

Preparing for the property auction - Auctions can be daunting when going for the first time. It is a good idea to go to an auction as a spectator before you actually bid. You don’t have to be there in person on the day as they do take telephone bids, however it can be beneficial to look around and assess the competition on the day.

At the auction - First of all you will need to register make sure that you bring identification and enough funds for your ten percent deposit. Auctions can be crowded affairs, so get there early if you want a seat. When the time comes to bid, make sure that you can be seen by the auctioneer and that he is aware when you're bidding.

Bidding - While bidding make sure that you don't get carried away. Have a maximum figure in your head that you don't want to exceed as it can be very tempting to go over budget.

If you are bidding on a property and it fails to meet its reserve price, this doesn’t mean that the property is lost forever. The auctioneers can still act as agents, if a price can be agreed at the end of the lot. This is often a good way to pick up a buy, as a vendor might have set an unrealistic reserve price, but could be willing to do a deal after the auction. Likewise, you can also bid prior to auction, so it may be worthwhile checking this possibility out with the auctioneers.

Get a good deal!
It can take time to do your homework prior to auction, and it is admittedly pretty nerve-racking actually taking part, however properties for sale at auctions are much cheaper than on the open market so it’s a worthwhile process if you are looking for a bargain.

If you are interested in property auctions, visit primelocation.com