In earlier days, issued figures claimed that the average UK property rose in value by 8% over the year to April, a big leap that could spell bad news for first-time buyers. Moreover growing number of people are looking at new ways to get onto the property ladder because of this issue. Many are buying with friends; some are asking their parents to act as guarantors on their mortgages for permitting them to buy before prices get even higher, while others are looking to buy discounted properties at auction. Make sure you know the cost of similar properties in the neighborhood. It might seem eccentric to hear this from an estate agent, but buying at an auction can sometimes be a smart move, particularly if you secure a property for 10%-30% less than its open market value. Because many properties going at auction are simply those that have been reclaimed for non-payment of mortgage or bankruptcy reasons, they are in a perfectly good state frequently. However, property auctions are not for beginners.
Experience of property is vital before you turn up at an auction, so if you do not have any either take along someone who does, or stay well clear. If you are determined to buy at auction, it goes without saying that you should know the area you aim to buy. You should also have studied the brochure on the property you like in depth and have visited it in person. Make sure you know the price of similar properties in the neighborhood and always try and find out whether the property you are interested has been on the market and also be sure that properties are with local estate agents. If an agent had it on their books for nine months and still could not sell it, there may be something drastically wrong, so you know that a full structural survey will be required. If you are still keen after viewing and your initial research, you may choose to hire a solicitor to carry out searches and sometimes even check the title deeds for any restrictions or problem areas. This can be quite an outlay when you cannot even guarantee your bid will be successful along with the survey.
In many cases, auction houses will make the guide price low as this will catch the attention of a large number of bidders. This can result in a higher end price because of the strong demand for the property. Something that many people are unaware of is that auction houses issue the number of properties that sold and reached reserve price in the prior auction. These figures are a good indicator in helping bidders determine whether an auction is likely to be a cost-effective step onto the property ladder or a costly transaction that is best left alone. It is necessary to set a price limit before you start bidding at an auction itself as well as easy to get carried away when bidding so always bid with your head, and not with your heart. In case if your bid is successful, you will be asked to sign the contract in the "sale room" afterwards and be asked to pay a deposit, usually of 10%.
