How to bag a property bargain at auction
By Corin Vestey 18th
January 2008
There's no doubt about it, the housing market is having a wobble. Mortgage approvals
are down 30% from last year, and according to
the Independent, government figures show price
inflation continues to fall.
But before we all start to panic about a 1990s style crash, is it all doom and gloom
on the property scene or might there still be ways for homeowners to prosper?
Well, on the bright side, many experts think a repeat of the recession of 1991 and
1992 is unlikely. That unique set of events was triggered by high unemployment,
major economic downturns and soaring inflation, which lead to huge numbers being
unable to afford their mortgage repayments and some 150,000 families losing their
homes. In 2008, despite what’s happening in the property market, the number of people
out of work is at an all time low, while wages are still increasing every year.
And as mercenary as it sounds, even if history did repeat itself, more repossessions
would create big opportunities for some, particularly for those at the bottom end
of the property market. And they may not have long to wait. Home repossessions are
increasing right now according to latest figures from the
Bank of England and, as sellers find it increasingly
difficult to shift properties, many look to auction houses in the hope of a quick sale.
For those first time buyers who are brave enough, there are definitely some bargains
to be found at auction. But how should a novice go about it? Luckily
home insurance provider MORE TH>N has some suggestions to take
the fear out of the whole process.
1. After you get the auction catalogue, view the property you’re interested in and
research the area properly. Find out how much similar houses are going for, and
dig around to see if the one you want has been on sale at any estate agents. If
it has and they've not been able to shift it for months, alarm bells should ring
– a full structural survey might be in order.
2. Get your solicitor to carry out the normal land and property searches.
3. Make sure your finances are in place. Have a mortgage agreed in principle and
a 10% deposit ready for payment on auction day.
4. Lucy Alexander from BBC1's
Homes Under the Hammer says that if you're
new to auctions you should "sit in on one first before you join in. Bidding isn't
for the faint-hearted."
Property expert Dan McLeod would go even further.
He suggests you either take someone along with you who has property experience or
steer well clear.
5. On the day of the auction, bring two forms of ID, your cheque book and all your
banking details with you.
6. Arrive early and get a good spot so the auctioneer can see you clearly. When
bidding, put your hand up rather than something subtle like winking!
7. Finally,
Lucy suggests: "If a property fails to reach its reserve
price, don't give up! The vendor may decide to accept your bid later at the end
of the auction. Make sure you leave your details with the auctioneer."
Get contents insurance for the home of your dreams at
MORE TH>N. MORE TH>N is the direct financial
services arm of Royal & SunAlliance. It offers motor, home, pet, life and travel
insurance by phone and via the internet. It also offers van, shop, office, business
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MORE TH>N is a registered trademark of the Royal & Sun Alliance Insurance Group
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