The article refers to purchasing property at auction, the essential planning, and the steps required to complete a successful property acquisition. Although the general property market faces testing times, auctions are where deals can and are being done.

These circumstances have led to rapidly shifting criteria by lenders, with funding lines that were previously available either being withdrawn or altered beyond recognition; therefore, how can I assist you in raising finance? I manage a regional finance business with access to a panel of over 100 lenders, from high-street banks and institutional investors to merchant and private banks, wealthy private individuals, groups, and venture capitalists.

Property

Whether you are a seasoned property investor or a novice, no disputing property auctions are where extraordinary bargains will be had for those with a keen eye for a deal. But how do you obtain finance in a market where LTV ratios are falling without employing substantial amounts of your money?

So why use an auction? There are many reasons people consider buying or selling at auction; they may want to move quickly, they may be looking for a plot of land for development, the property may involve repossession, or they want a quick purchase without the risk of gazumping. Also, many buy to let investors consider auctions because of the variety of properties on display at any

one time, and by nature, there is a good place to bag a bargain. With repossessed properties, the lender who has taken ownership of the property owes a burden of care, “an equity of redemption,” to the client to whom they initially lent monies. This means, in practice, that a lender who repossesses will generally offer these types of properties in an auction, so they remain places where undervalued properties can be acquired.

Buying or selling properties at auction can have several advantages for both the buyer and seller. Most of the delays associated with property transactions are eliminated, the auction and completion dates are fixed, and the sale contract becomes binding upon the fall of the gavel Vinzite. The following tips section of this article will focus on the property transaction primarily from the buyer’s perspective, emphasizing the lenders that operate in this market.

Tips

Inspect the property and do as much research as possible about the property and the neighborhood. There are house price sites to determine how much similar properties have sold for. Ensure you read all written material provided by the Auctioneer, the Legal Pack, and the HIP. It is important to fully understand the contents and the terms and conditions of the auction.

Ensure sufficient funds are available for the deposit, which will need to be paid at the auction, i.e., often 10% of the sale price, but you should check what the deposit will be before the auction. Also, check which payment methods are acceptable (as some methods of payment may not be good, such as cash or credit cards).

Most Property Auction Houses do not advertise to the public as they are still aimed at professional purchasers, so you will need to make inquiries on the Web or at your local estate agent to determine when and where a property auction might include properties of interest will take place.

Be prepared to move fast. Property Auctions occur only three to four weeks after the property auction catalog is first issued. If you are subsequently successful at auction, you will usually have between 14-28 days only to complete. A ten-day default period will follow this where the purchaser will be charged interest and can, in the worst case scenarios, be used to extend the 14-28 day period. Check the Auction guide small print to see what penalties this will incur.

An intention to bid will need to be registered (either before the auction or in the auction room). If the bid is successful, the sales memorandum must be signed, and the deposit will be paid there and then.

The buyer will often be responsible for the property’s insurance when the gavel falls. The date of completion, when the balance of the purchase price will be paid and possession will be taken, will be stated in the conditions of sale.

If a property being sold does not make its “reserve price,” then although this is generally not disclosed, the auctioneer will state that the current bids are close to the reserve price. A subsequent conversation after the auction may allow you to purchase the property below the reserve price if the vendor agrees.

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