4 Top Tips to Give You the Edge during a UK Property Auction

Did you know that humans have discovered approximately 900,000 insect species on Earth? We classify virtually everything in our world. When a new animal species is discovered in the world, we assign it a scientific name that seems to indicate that it originated from another planet. We sometimes as a society collectively classify things wrongly. For example, while a tomato is technically a fruit, we typically refer to it as a vegetable. And we create “fusion” music, dishes, clothing, etc. to make classifying even more of a headache. For example, there is pop-punk music and a dish called grilled tempeh & mushroom quesadillas. 

From exceptional to rundown

Likewise, when preparing to participate in property auctions for sale in the UK, it is important to know what types of property auctions take place. We may wrongly assume that every auction is basically the same, when in fact, they are actually quite diverse. First, we should consider the types of properties at auctions, which property auctions agents can provide guidance about:

Exceptional Properties: As the name suggests, these properties are heads and shoulders above average properties. So why would they need to be auctioned off? This category of auctioned properties includes those with historical significances, and plots of land that “interfere” with major development projects. 

Investment Properties: This is a property that the owner does not occupy. Typically a person buys the property, to create profit through rental and/or through capital gains. Capital gains involves buying something and then selling it at a higher price, in order to turn a profit. Examples of investment properties include offices, shops, and blocks of flats.  Investment properties are the converse of non-investment properties, which do not create capital. 

Repossessions: In this case, a lender or seller takes back a property, from a borrower or buyer. Typically, repossessions occur due to default, or the failure to: 1) make required debt payments in a timely manner, or 2) adhere to other conditioners of an agreement or obligation. 

Rundown Properties: These properties cannot be sold in their current condition. They can be classified as Rundown Properties for a variety of reasons, such as major disrepair, being subject to authority notices, etc. So, why would someone want to buy a house that resembles a haunted mansion? You can still grab rundown properties in an outstanding location, for a rock-bottom price. Then you could renovate it and earn a hefty profit. It might be surprising that some organizations actually earn their living strictly from auctioned rundown properties. 

Size matters

In addition to various types of properties at property auctions, different types of auctions also exist. These classifications are primarily based on the number of properties represented in the auction: 

Large Composite Auction: This type of auction usually has over 100 lots. The venue is usually a large conference centre or hotel, with more than 300 people in attendance. In Typically only a single auction house runs the auction. However, the types of properties being put up for auction can be limited to a single type, or include a blend of different types. 

Medium Composite Auction: An auction of this type usually has a range of 5-100 lots. It tends to be located in a moderately-sized conference centre or hotel, with an attendance figure ranging from about 200-500 people. The Medium Composite Auction is quite similar to a Large Composite Auction, but is on a smaller scale. 

Single Lot Auction: In this type of auction, sellers wish to sell a single unit or lot for one price, to one bidder. The seller dictates the length of the auction. A Single Lot Auction is typically for a property that has a huge demand. 

Small Composite Auction: This type of auction usually features 2-5 lots, with a maximum of about 5 bidders. The venue for this type of auction can include the following places:

- church

- pub

- restaurant

- small hotel

These types of auctions typically include a theme. For example, a single company may offer a group of properties at a Small Composite Auction, with the hopes of maximizing their returns. 

Winning tips

Regardless of what types of properties are being sold at a particular type of auction, here are some tips to help you secure the house or lot that you want at property sales: 

1. Do not miss the opportunity of uk property auctions

When buying at a property auction, you can save up to 40%. How is this possible? Mortgage lenders, housing associations, and mortgage lenders tend to put up properties at lower “reserve” prices, in order to sell them faster than hotcakes. Simply put, they have tons of flats and houses that they want to get off their hands, so they probably do not value individual properties as much as you would. 

2. Get organized before the auction.

Before a property auction you will have to secure: 1) valuation/survey,  2) conveyancing, and 3) mortgage. The valuation is a basic assessment of the property, allowing the mortgage lender to verify that it is worth the amount that you are borrowing.  Meanwhile, conveyancing includes the legal work that the purchasing and selling of a home, entails. 

These costs could cost you hundreds of pounds, and you still must win a bidding war at the auction. However, if you can afford these costs, then the property auction is certainly worthwhile.

3. Never hesitate 

When purchasing a property through an auction, the speed of the process is much faster and the ambiguity much greater than through typical means. You have roughly 3-4 weeks from the time that the auction is announced in a catalogue, to the auction’s date. Your success is only verified when the auctioneer’s hammer hits the sound board, announcing that you have won the property auction. 

4. Know the property auction process

To be successful at property auctions you do not have to be a guru. However, you do have to know how a property auction works, and what is required to give you a chance at winning. Prepare for the auction as though you have accepted the offer, and are preparing for the actual purchase.