As we move into spring and the majority of auction houses have now had their first events of 2016, now is the time for new buyers to start doing their homework.
For pro-active prospective buyers, there's plenty of research you could (and should) be doing in the lead up to an auction.
Here are my top tips...
First of all, make sure you are on the list to receive a catalogue as soon as it becomes available. The electronic version comes out before the hard-copy so give yourself a head start and get yourself on the email alert list.
Research the areas in which you’re looking to buy. But remember, it’s a competitive market, so keep an open mind to other similar areas that might also fit your property model.
If you plan to buy a renovation project to sell on again, the location is arguably less important because, hopefully, you won’t keeping hold of the property for too long. But you do need to make sure there is a strong enough market for your planned property model. Find out a typical ceiling price for the area – this will help you to identify a good deal when the catalogue comes out.
If you’re buying a property to let, consider different models. Are you looking for an income generator – something that might allow you to reduce your current working hours for example? Or are you looking more long-term with an eye on the capital appreciation of the property rather than the monthly rent it produces?
If you’re looking for the capital growth, the location is key. You should be looking to capitalise on upcoming areas. Speak to agents, ask them about the market, chat to locals, visit the local artisan market, go for a coffee – spend time in the area.
However, as the old saying goes, “if it seems too good to be true, it probably is…”. And be careful not to rush into the first property you see that you think is a bargain.
Now is perfect the time to get your Mortgage in principle organised. Buying a property at auction is a binding agreement and carries the same legal implications as a signed contract by private treaty.
You could lose your deposit if you don’t complete within the given time (usually 28 days) so the more arrangements you can have in place before you commit to a purchase, the better. Use these few weeks running up to auction wisely.
*Andy Thompson is an Auction Consultant at Edward Mellor. You can follow him on Twitter @AndyT___.