Repossessed House Auctions

Repossessed House Auctions

The average UK home costs around £200,000 whereas the average price of houses sold in auctions are around £130,000 to £170,000. This enables many people ranging from hard-pressed buyers to first-time owners to go to auctions for foreclosed properties. Thousands and thousands of repossessed homes are auctioned as banks and lenders are much more interested in selling the property rather than making a huge profit. However, buying in an auction needs a lot or preparation and planning so that you would not end up making a costly mistake.

Do the groundwork
It is wise to do your research on the property. It is best to check out the location of the property and the establishments near it. The neighbourhood and location can also determine the market value of the property so it is best to pay a visit and see it. Often catalogues and text descriptions will simply not paint a clear picture of the property's condition. Paying a visit can give you a first-hand look at the positive and negative aspects of the property. Furthermore, visiting the house will give you an opportunity to take a builder to assess any future repairs that might be needed. It is also important to get a survey on the property for a basic evaluation to ensure the structural integrity of the property.

It is also best to get yourself acquainted with how a repossessed house auction works. It can become a bit overwhelming and nerve-racking to bid in an auction so it would be best to familiarize yourself with the process. You can also ask for a catalogue with the properties to be auctioned. This would allow you to research on what would be a fair price for the property based on other similar repossessed homes in the area.

Set a price limit
Set your highest bid and stick to it. Do not get pressured and engage in a bidding war – other bidders might push the price higher and higher and the property might not necessarily be worth it anymore. You should also estimate potential expenses such as repairs, redecorating, legal and surveying fees and all of these on top of your mortgage. There might be a buyer’s fee for the auction house. Additionally, there might also be tax fees that you would need to settle.

Arrange your finances and mortgage before the auction
If your bid on the property is successful, you would need to pay an initial deposit, usually 10% of the amount on the spot. It is usually paid using a cheque as cash is not accepted. You would need to complete the payment on an agreed date, or else your deposit will be defaulted. So it would be best to make sure you can get a mortgage before that date.

Over 300 companies run auctions for residential properties in the UK. The process of buying repossessed homes in an auction can indeed be very overwhelming. So make sure to do your homework to ensure that you are making the right investment.

Visit our repossessed house auctions homepage and click on your local area in the right menu bar to get lists of auctions close to you.