Attending A Seized Property Auction in the UK? Here Are a Top Tips
There’s a sad reality in today’s real estate market: Many people who buy property often cannot afford to do so. Forces beyond their control often force these people into foreclosure or bankruptcy and often creditors offer their properties at auction. Whatever the reason, the result is that there are many attractive properties to be had at bargain prices in a UK seized property auction.
Seized property auctions are often run by banks and credit card companies who are hoping to recover the funds owed to them in whole or in part. “In part” is the operative phrase here because creditors will often accept substantially less for a given property. The result is that buyers may find properties at as much as 40% off the true market value.
Factors That Influence the Price
Another factor that may cause lower-than-normal prices at a property auction is that often there is no reserve price set. The reserve price is the minimum bid set by the seller. Bidding at a public auction begins at that amount. In addition to the absence of a reserve, seized property for auction may offer homes or business locations that are in need of repair or renovation. This means that the bidding is likely to start very low. If you have the means and expertise to repair the property inexpensively, such properties can net you a tidy profit when sold.
More Tips For Successful Bidding
Here’s a another tip: Look for sparsely attended auctions, so you’ll have fewer bidders competing with you. This means that you should look for auctions that are scheduled early in the morning or in out of the way places. Also, as you attend auctions, you’ll learn who the best auctioneers or auction companies are. It’s likely that auctions sponsored by these entities will contain superior properties. Even if you’re in the market for a “fixer-upper,” you’re more likely to find a sound bargain at auctions of seized property sanctioned by reputable firms. Another tip is to be a “jumper.” This means you wait until the last moment to bid in an attempt to “jump” over your bidding competitors.
More Reasons to Attend an Auction
Another reason the purchase at a property sale auction is that you can be sure that the seller is serious. With non-auction property sales, if there are multiple people interested in the property, the seller can pit the buyers against each other in an effort to artificially inflate the price. If you’ve ever experienced this, you’ll be grateful to know that most sellers at an auction of seized property are quite motivated to sell quickly. Also, in an auction there’s no drawn out haggling or negotiation. When the auction’s over, it’s over. The selling price is the selling price. And since buyers usually must travel to attend the auction, they tend to be more motivated than buyers of non-auction properties.
Whether it’s a government auction for non-payment of taxes or a bank auction for default on a mortgage, you remain in control. You can choose to stop bidding whenever you want. Also, unlike a traditional real estate transaction, there’s usually no agent involved and no commission due to him or her, although a fee may be due to the auctioneer or auction house. With all its positives and so few negatives, attending a seized property auction is a great way for UK buyers to snap up valuable properties at rock-bottom prices.