Buying a Property At Auction← Back
Many good investments can be made at auction.
For most people buying at auction can be a little like being in the "Twilight Zone", not knowing if what you are buying will still be standing this time next year or if you ever have a hope of being able to extend it or refurbish it in the future.
We're looking at a house that's for sale at auction at the moment. It has been a steep learning curve and, with the auction a week off, there is still a long way to go. I've been to auctions before and wondered quite why so few people were prepared to bid - but now I know. Boy, it's a lot of hard work, and expense, to get prepared.
Obviously, you can't just turn up and bid. Well, you can, but you'd be taking a huge risk. So in my case, there are four areas that need to be de-risked before getting into a position to nervously nod that head. I thought I'd pass them on.
1. Financial Viability
You need to investigate how the economics of the site stack up. What is the end value of the finished house - and how much will the project cost to undertake? The selling agent/auction house should be able to give you some pointers.
2. Getting Finance in Place
You'll need to pay 10% on the night and be able to complete the purchase within 28 days. If you can't do that, you lose the deposit. So you need to ensure that any lending/mortgage is guaranteed before the auction. This is likely to include requiring a valuation on the property, which usually takes a week or so. Make sure your lender is able to complete in quick time.
Appoint a solicitor to go through the conveyancing work before the auction. The auction house will provide an auction pack with relevant searches etc. but you should engage a solicitor to act on your behalf beforehand, and to ensure your plans are not endangered by something on the legals. You should expect to pay in the region of £500 for this.
You won't usually have time to submit a planning application on the property before it goes to auction - and nor would it be practical to do so, given the need to appoint designers etc. However, you should get as much of a grip of the plausibility of your proposals beforehand either by studying the local policies or, preferably, consulting the council for pre-application advice. Most (not all) councils will be able to turn it around in a few weeks and it should at least give you a basic idea of what can be done. You could always get a planning consultant to investigate the situation but you will have to pay for this.
We at Architectural Building Design Services often get enquiries from people considering buying a property at auction in view to what the Planning Department will let them do with the property and how far it can be extended.
We have over 25 years experience dealing with architectural design and securing planning approval for a wide manner of projects. We can investigate into the local area, local plan, similar properties which have been extended and also find out if the property is listed, if any tree preservation orders exist of the site and the likelihood of the planning department granting you planning permission for your "dream" home.
We have a wide experience with domestic and commercial properties.
Our advice to you if you are thinking about buying a property at auction would be to contact us on 07773 899 597 to discuss your requirements and allow us to give you a free "no obligation" consultation.
Our company are "award winning" designers, are currently the most recommended architectural consultancy in the UK and offer a unique service where we give 100% customer satisfaction.
Architectural Building Design Services are based in the East Midlands and have offices in Heanor, Belper and Alfreton. We cover the local areas of Chesterfield, Leicester, Derby and Nottingham.
We truly have "the man with the plan".