The experts at Belvoir reveal their top tips for buying or selling investment properties at auction.
Property auctions can enable us to buy a bargain or sell at speed. Follow these top tips to get the best from your auction property purchase or sale…
Buy a bargain
“Buying a property at auction can be a great way to secure a rental investment swiftly and sometimes below market value,” says owner of Belvoir Nuneaton and Hinckley and co-owner of Belvoir Tamworth Clayton Foston.
“If making a property purchase at auction sounds appealing to you there are a few simple steps that can aid your potential success.
“Before the auction always arrange a viewing at the property that you’re interested in. Look out for hidden issues and ask yourself why the owners have decided to sell at auction. Contact a local lettings specialist for their advice on rental demand in the area and possible achievable rental return too.
“Set a realistic budget based on this, factoring in any potential renovation costs that may be necessary, plus how long it will take to get the property ‘move in’ ready.
“On auction day, ensure you arrive in plenty of time so you can assess the competition and get a good position in the auction room. If possible, try and attend previous auctions in order to observe proceedings.
“When the bidding starts always stay calm and don’t get emotionally involved – this is a business decision. Don’t bid too early or in overly large increments either as this may push the price up unnecessarily. Be mindful of your set budget at all times and ensure you stick to it.
“Importantly, if you fail to secure the property you wanted don’t ‘panic buy’ an alternative property from the brochure just so you don’t go home empty handed. Prior viewing and research is essential.”
√ Research the local rental market before bidding
√ Set a realistic budget
√ View the property before auction day, looking out for hidden issues
√ Assess potential renovation or modernisation costs
√ Ask your local letting agent about possible rental return figures and further advice
√ Attend other auctions to observe proceedings before the big day
√ Arrive at the auction in plenty of time
√ Stay calm during the bidding process
√ Don’t overbid in overly large increments
√ Get your finances in place prior to the auction
√ Don’t ‘panic buy’ a property you haven’t viewed or researched because you missed out on the one you have
Sell at speed
“If you’re selling your property at auction research the auction houses in your area carefully. Think about national auctions too,” says Clayton.
“Find out their fees and commission costs before committing, plus enquire about their background and perhaps ask to see testimonials and feedback.
“Before placing your property in auction make sure it’s looking its best and the sums add up. Do the maths to work out if a little decorative investment would equal a better return or if profit would be maximised by it being sold in its current state.
“Find out the value of the property, based on other similar properties in the area and market demand. Ask an expert for their advice.
“In addition, find out how, where and when your chosen auction house advertises their auctions and ensure as many people as possible know about your property and its forthcoming sale.
“Set a realistic reserve price (based on market conditions) if you wish and make certain the auctioneer is aware of the minimum amount you are willing to accept.
“Once the hammer falls the transaction is likely to be swift so have all paperwork relating to the property accessible in order for completion to be achieved at speed.”
√ Research auction houses in the area
√ Find out your property’s market value
√ Set a reserve price
√ Ensure the property is ready for sale and looks its best
√ Make sure the property is marketed efficiently before the auction
√ Research national as well as local auctions
√ Find out what fees and commission you will have to pay
√ Gather together all paperwork relating to the property
√ Ask your local agent for their advice