Buying Property at Auction: A Case Study

"We decided to buy a property at auction when we came into a bit of money. We wanted to buy a house and renovate it to either sell on and make a profit or to rent out to give us an additional income. We didn’t have a lot to spend on the property and the renovation so we had to make sure the property we bought was a real bargain.

We already had a house that we lived in but we had never undertaken anything like this before so we were quite nervous.

We got the idea of buying at auction from a television show. A lady on the show was in almost exactly the same situation as me. She wanted to use some inheritance to buy a property and she was also looking at taking on a renovation project as she had retired and wanted something to occupy her time. The presenter suggested she buy at auction and accompanied her to one. She bought a house at a rock bottom price. It was in need of a lot of repair but because she had saved so much money on it she was able to invest a hefty amount in renovating it.

We decided this was the best route for us to take too. The problem was we had never even been to an auction before so we had no idea what to do. We decided to get some help."

Speaking to an Estate Agent

"We didn’t know where to go to for advice but thought maybe an estate agent would be able to help us. We spoke to an estate agent in the city centre and he was extremely helpful. He asked us what type of property we were looking for and in which area and advised us on the auction house we should use. He also contacted the auction house to tell us when the next auction was and to tell them we wanted to attend."

Viewing the House

"The auction house sent us a brochure containing all of the properties that would be on offer along with guide prices. We saw a house that would be ideal for us and arranged a viewing. The house was in a terrible state but we could just about see past the disrepair enough to see what we could do with it. It was the ideal size and the perfect location."

At the Auction

"When we arrived at the auction we were terribly excited. We had a limit to what we would spend as well as an ideal. We had allowed ourselves an extra £10,000 on top of the amount we wanted to spend in case the bidding got high. We really wanted this property!

Unfortunately a lot of other people wanted the property too and on this occasion we were not successful. The house sold for £23,000 over what we wanted to spend and we just could not afford to do that and invest in the renovation it so desperately needed."

Second Time Lucky

Despite being a bit deflated we wanted to try again. Two months later we found another property in an auction brochure that suited our needs. Luckily this time we were able to get the property for below the price limit we had set."

After the Renovation

"We spent 18 months renovating the property. It was more work and more expensive than we had ever expected. But it was worth it because the final result was great. We decided not to sell the property but to rent it out. Because of the renovation we had done including putting in an upstairs bathroom and extending the kitchen we were able to rent it out at a very profitable rate."