If you’ve watched TV programmes such as Homes Under The Hammer, you may be tempted to look for a bargain at a property auction.
It’s an increasingly popular idea.
In 2016, one UK property auction company alone sold more than £95 million worth of property.
Auctions are a place where you can pick up bargains if you’re prepared to refurbish and renovate houses. However, there are a few pitfalls.
Fortis Properties Managing Director Jamie Langley said: “You can easily get caught up in the emotion of the day and end up paying too much for a property.
“If you’re in a bidding war with another would-be buyer, it can be hard to let go and walk away. There is an understandable urge to beat them!
“If you haven’t done your research, it can also be easy to buy a property which will cost you far more than you had anticipated because of structural or legal issues which you didn’t pick up.”
Here are the top four dangers you could encounter by buying at auction:
1. You get auction fever and keep bidding past your limit.
This is so easy to do. You have a limit in mind, but someone else keeps on bidding, so you push through that limit to ensure you clinch the deal. The problem is this: You set that limit for a reason. Either you can’t afford more, or the property isn’t worth it. Either way, you’ll wake up with buyer’s remorse.
2. You don’t have time to view the property and end up with a money pit.
You see the details, you may even have a quick viewing, but you really need time to ensure you know exactly what you’re buying. Ideally, you’ll need to take a builder or architect with you to view it, to give you a realistic idea of the cost of renovations or repairs. They’ll also have an experienced eye which will pick up things you may not notice. Without doing this, a budget for renovations is in danger of being like someone sticking their finger in the air.
3. You don’t read the legal pack and miss something costly.
Whether it’s issues with the leasehold or freehold, problems with access, or disputes over boundaries, you need to be aware of all the potential issues. Renegotiating a lease could cost you thousands which you hadn’t anticipated spending.
4. You don’t get your finances in place speedily and end up paying out big bucks in interest.
If you don’t have all your finances in place before the auction, you could end up searching for a mortgage or bridging finance to ensure you don’t lose the property. This could be a very costly exercise. You’re not in the best position to find the best deals if you’re rushing this process.
Think auctions are your only option to get a property bargain? Think again! Local property experts will have an in-depth knowledge of the area which could help you find a property to renovate.
If you’re looking for a home in Cardiff, call our experienced team on 02920 561111.