Buying a property in the UK is rarely a smooth process.
There are countless opportunities throughout the procedure for the deal to collapse and things to go wrong to the extent that over 50% of property transactions agreed with estate agents actually fall through.
This is not the case, however, when it comes to buying property at auction.
One of the main benefits to buying property at auction is the certainty of the deal.
When you attend a property auction, you must have your 10% deposit readily available, you make your bid and if you win, you pay the deposit and exchange contracts there and then on the day before even leaving the building.
With that being said, most agents won’t even explore the prospect of buying a property at auction, which makes us somewhat unique at Rocket, as we are determined to find our clients the best deal possible and if that happens to be at auction then so be it.
In fact, over the years we have accumulated a wealth of experience buying properties at auction and we have had a lot of success finding our clients some terrific deals.
Just recently, we were given a brief from one of our clients who wanted to purchase a freehold property that could get a rental yield of 7%.
We scoured the market and found a property that fit the bill at an upcoming Barnard Marcus auction and after presenting the numbers to our client, they approved and told us to go for it.
The client had been hoping to spend £525,000 and they were willing to go up to £550,000, but we managed to purchase the property for £520,000 and we believe we will be able to get a 7.4% rental yield much to the delight of the client.
One of the downsides to buying property at auction is the limited time you have to do all the research, legal work, surveys, evaluations, property visit and whatever else, but at Rocket we work efficiently to handle all of that for our clients.
In terms of logistics, buying in cash is helpful, as it makes things less complicated, but nowadays it is possible to get bridging finance, but it can be quite expensive.
Prior to the auction you have to send the auctioneer some money to get your deposit registered, but if your bid is unsuccessful that money will be returned.
You also have to undergo some pretty rigorous AML (Anti-Money Laundering) checks to make sure you are who you say you are and that your money is coming from a trusted source.
Ultimately, the main tips for anyone looking to buy a property at auction is do your research and always set a price limit.
And if you really don’t want to go wrong, hire Rocket to do the buying for you and we’ll make sure the whole process runs smoothly and that you come away with a profitable property investment.
To find out more about buying property at auction, listen to The Gavel and The Gabble podcast, or read our collaborative blog with Windsor Auctions.
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