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Why Buy at Auction?
Why Buy at Auction?
Property auctions offer a fast and efficient way to secure a property, often at competitive prices. Once dominated by cash buyers and investors, auctions are now accessible to a wider range of buyers, including those using mortgages.
How Do House Auctions Work?
How Do House Auctions Work?
Auction properties are listed online for around a month before the sale, allowing buyers to research and view them. Auctions operate in two ways:
Traditional (Unconditional) Auctions: Bidders gather in person or online on a set date. The highest bidder exchanges contracts immediately, paying a 10% deposit and completing within 28 days.
Modern (Conditional) Auctions: Bidding occurs online over a set period. The highest bidder pays a 5% reservation fee and has 56 days to complete (28 days to exchange contracts, then 28 days to finalize payment). This method is more mortgage-friendly.
How to Succeed at Auction
How to Succeed at Auction
Prepare Your Documents – Bring ID, proof of funds, and mortgage approvals.
Set a Budget – Stick to your maximum bid to avoid overpaying.
Stay Disciplined – Don’t get caught up in bidding wars. If you miss out, there will be other opportunities.
Winning an Auction – Next Steps
Winning an Auction – Next Steps
Pay Your Deposit or Reservation Fee – This is due immediately after winning.
Get a Survey – Particularly crucial for modern auction purchases.
Secure Your Mortgage – Lenders will conduct a valuation before finalizing.
Insure the Property – Buildings insurance should be in place upon contract exchange.
What Happens If You Back Out?
What Happens If You Back Out?
Traditional Auction: You lose your 10% deposit and may incur further costs.
Modern Auction: Backing out within 28 days forfeits your 5% reservation fee; after exchanging contracts, you lose both the reservation fee and deposit.
Pros of Buying at Auction
Pros of Buying at Auction
✔️Potential for a bargain
✔️Transparent bidding process
✔️Quick transaction with fewer delays
✔️Mortgage financing is increasingly available
Cons of Buying at Auction
Cons of Buying at Auction
❌No guarantee of winning
❌Immediate financial commitment required
❌Difficult to withdraw after winning
❌Auctions can be emotionally charged
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