PROPERTY AUCTIONS

I bought a property at auction about 15 years ago so things may have changed but yes you can get a mortgage on an auction property, but it all has to be arranged in advance of the auction. Once the hammer drops you are committed to buying, and buying quickly - about 7 days you have to pay up as I recall. So if you haven't got a mortgage sorted you will be well stuffed. If you can't pay for the property then the owner can put the property back up for auction and you are legally obliged to cover any losses he makes including the auction fees, solicitors fees etc. You can get good bargains at auctions but it's not for the faint hearted. Auction houses produce legal packs for each property - ask for the one for the house you are interested in.

not interested in any yet but may be in a few years time when negative equity and repossessions start to kick in with a vengeance. i imagine you can get better bargains when the house market is falling as it will be in a few years time.

10% deposit on the day paid by cheque and the balance 28 days later is, I believe, more normal today (the last 2 I went to did things this way, but it varies between auctioneers). You do not need to have the finance in place before the auction, beyond the deposit, but you have to be confident that it will be there within 28 days so talk to a few building societies in advance. At one auction there was a mortgage adviser on hand to sell their products on the day (it's better to shop around of course). If you fail to pay up, the deposit will be lost and you will be liable for any losses the seller suffers.

Most auctioneers will be wary about accepting cash.

how much cheaper than market prices do the properties usually go for ?

-10% at the moment I believe since so many people a flooding auctions rooms because they know they can get a bargain.

Try this

- Online auction house links

Daytona

It's difficult to compare prices. A typical auction property might be in a condition or a location that an average buyer would not accept. In spite of this, prices are occasionally higher than the rest of the market. Typically though, if you know enough to be able to bring a tatty property up to a saleable standard without, for example, paying 30 per hour for someone to tile the bathroom, you can make money. If you don't know enough, the guy tiling the bathroom will be the only one who makes money.

Some auction properties are in places where all neighbouring properties are derelict or boarded up. If you buy one of these, however much time and money you spend on your property, noone will want to pay to live there.

I wouldn't hold your breath for negative equity. The last time this happened was as a direct result of a very specific set of circumstances overheating the market and then huge interest rate rises killing it off. There is still more demand than availability, and all that will happen is a slowing of growth to more normal levels. Best hope you have is that demand slows and you get desperate sellers.

With regard to auctions, the previous post is right. Auction houses require you to present a bankers draft for 10% at time of sale. They do not accept cash or credit cards. Balance due within 7 days. You get access to properties beforehand, and it's up to you to arrange funding, mortgage, etc. before buying.

John

sorry but i am 100 % convinced there will be a massive slump with prices starting to fall between q1 2005 and q2 2005. i am more than 100% convinced of this. i want to be ready in a few years time to get some bargains.

How can I provide a bankers draft, presumably already written by my bank for an amount un-known at the time I request it?

tim

If you want a house to live in you will get one bargin. But as the market will have dropped and you will only be able to sell on at the price you paid how will you get several? (And don't say to rent out, because I am

100% convinced the slump will be caused by all the new BTL properties that are now coming to completion being sold in ahurry by their buyers when they find there are no prospective tenants for them)

tim

if he's still singing it could put people off.

so is having the lead singer of hermans hermits living in a neighbourhood a good thing or a bad thing then??

cheers

richard

ok. a bargain. if im very lucky.