Global Advice – Tips for Success at an International Real Estate Auction

December 2nd, 2014 by melissa

We wanted to share with our readers some tips on dealing with real estate auctions outside of the United States. Our friends at Ashley Wilson in London kindly outlined the details on how to best prepare for property auctions across the pond. You may find a lot of similarities despite being conducted on different continents – take a look!

Bidding for Properties at an Auction

Buying a home at an auction can be a fantastic alternative to purchasing in a conventional manner. Whilst buying a home in a traditional way can involve chains breaking down and a whole series of other disappointments, a process that usually takes months can last for just minutes when you buy via an auction – and what’s more is that you own the property when the hammer falls. You shouldn’t attend an auction without doing your homework first though, and you should always seek advice from professionals, such as Ashley Wilson solicitors in London, before you agree to anything.

Preparing for an Auction

It’s a good idea to sit in on an auction before you bid at one so you can get a feel for what they are like in real life. When you have decided to bid at an auction, you should get in touch with the auction house in question and ask to look at their catalogue. The catalogues are usually printed weeks before the auction begins. You could also subscribe to their mailing list so you don’t miss out on finding out about any potential properties.
Some of the top auctioneers for both commercial and residential properties in London are:

    Auction House
    Barnard Marcus
    Barnett Ross

Do Your Homework

You should take a look at the property (or ‘lot’) that you’re interested in before you attend the relevant auction and may wish to attend with experts including conveyancing solicitors. You will probably need to be guided by solicitors on a regular basis, so it’s a good idea to affiliate yourself with property dispute solicitors or conveyancers before you get started with attending auctions.

It is also good practice to research the area you are looking to purchase a property in and the average price range. This will also give you an awareness of how popular the property could be at auction meaning you need to have a highest figure in your head for the worth of the property and as much knowledge as possible prior to attending the auction.

Popular areas for property auctions in London are without a doubt Central and North London. These areas are extremely expensive to purchase properties in, and property auctions allow homeowners, landlords and businesses to potentially pay a lower price and transform a property.

Remember to look into planning permissions and other due diligence if you attend auctions for property projects.

Other Things You Need to Know

You will need to have 10% deposit ready to lay down on the day of the auction, and will be required to pay the other 90% within 28 days if you are successful. It’s wise to arrange a mortgage in principle with a lender before you attend the auction. If things fall through due to a lack of funds, you may not get your 10% deposit back. Don’t forget that you are making a legally-binding agreement when your bid for a property is successful. If you can’t get to the auction house, you should be able to bid over the phone. You should get in touch with the house in question to find out how they do things. Don’t forget to take two forms of ID with you when you attend the auction as well as all relevant banking information.

Bid Clearly

When you do place a bid, make sure that the auctioneer notices you. You need to nod your head or raise your hand quickly. Sometimes lots don’t reach their reserve price, but don’t be downhearted if this happens, as your offer may be accepted later anyway. Don’t forget that the auctioneer can refuse a bid without giving a reason. Commercial property solicitors can give you all the advice you need on relevant subjects like collective enfranchisement.

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