Why Some Properties are Sold at Auction

A property auction, as the name suggests, is like any other auction whereby consumers bid for the same item and whoever offers the most money wins.

In a property auction the consumers are bidding on houses and other properties just as consumers would bid for antiques in an antique auction or gig tickets on an online auction site.

However since buying a property is such a huge commitment there are several differences to other types of auctions.

Why are Houses Sold at Auction?

Despite the increased prominence of buying at auction only a certain number of houses are sold this way. Repossessed houses are the most popular houses sold at auction. When a homeowner cannot meet his or her mortgage payments the house may be repossessed by the lender.

The house is often put up for auction then as the lenders wants to see it quickly. The keys to houses sold at auction are handed over within 28 days of the sale.

Property investors who buy several properties, often run down or in need or repair, may also use auctions to see the houses to other investors or developers as the want a quick sale.

Viewing the Property

With many auctions you get to view what you want to bid on through brochures or internet sites. Then on the day of the auction you are able to see the item in the auction room. With online bidding sites there are often photographs of the item on offer so you can see exactly what it is and decide whether or not it is what you want.

However when it comes to buying a property that will either act as your home or as an investment in yours and your children’s future you will want more than just photographic evidence of it’s condition and state. Indeed you will need to examine it closely in person.

With property auctions the properties on offer are advertised in advance. The potential buyer then has the opportunity to check out the house before the day of the auction. This is much like what would happen if the property was being sold in the ‘normal’ way.

The potential buyer would make an appointment to arrange a viewing of the property they wish to purchase. Then he or she can being a surveyor or estate agent to the viewing and examine the house in the normal way.

This gives the potential buyer the chance to decide if the house is really right for them and also allows them to figure out a reasonable bid. We all know pictures can be deceiving so it is vital that the potential buyer views the property before making any bid on auction day.

Several buyers have been burnt in the past after buying what they thought was a dream home (on paper) but in reality turned out to be nothing of the sort. It is important to check for damage such as dry rot and damp etc too so having a surveyor accompany you on the viewing in very important.

Safety First

There is also much more safety regulation in place than there is at auction where the items are of a much value, an internet bidding site for example. This is to ensure neither the buyer nor the seller will be left out of pocket, or worse still the victim of a scam, when they buy or sell the property.

Property auctions are very similar to every other auction and operate in the same way. However always remember this is a life-changing decision you are making and just because you’re doing it at auction you are still making a big commitment to buying the house. Don’t rush into anything and if you don’t feel comfortable buying in this way it’s best to stick to the usual route.