How online property auctions work

Have you ever considered buying or selling a home via a Property auction? You may be apprehensive if you’re unsure of how they work but they can sell a home fast and save you considerable sums of money. This is why many private residential home owners are considering this method of buying and selling property.

Sellers who price their property fairly will see it benefit from competitive bidding to increase the price it is eventually sold for. Also, landlords or property portfolio owners use auctions to take advantage of the ease of selling via this method.

Often properties are being sold due to bankruptcy, repossession or to clear debts, meaning that the seller may accept a discount, although prices increase when buyer out-bid each other.

Ensure that all viewings and surveys have already taken place. A homebuyers report carried out by a chartered surveyor will advise on the condition and value of the property. A mortgage will also need to be agreed in advance and a solicitor should be instructed to conduct searches and check title deeds.

The last and highest bidder is the successful buyer, who is then legally committed to paying the price bidded and completing the sale. 10% of the cost of the property must be paid upfront and the balance has to be paid in full within 28 days. Other costs include stamp duty and administrative fees.

If you are new to property auctions, the key pieces of advice from Redstones are to find out what similar properties in the area have fetched first and make sure you observe at least one auction before bidding, to gain some valuable experience.

Consider cheaper properties and unsold lots that the vendor will be keen to sell, which you may be able to buy with a lower offer. Always ensure you have a mortgage offer in place before going to an auction too, to complete your application in time.

Finally, our biggest piece of advice is to have a budget and stick to it! Don’t go above your price limit as it can create problems for you later on. However, there’s no doubt that property auctions are advantageous for both buyers and sellers, so we would strongly urge you to give them a try.

Find out more about property auctions at Redstones, through our auction site.