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Key Considerations When Buying Property at Auction

Purchasing property at auction can be an exciting and potentially cost-effective way to invest in real estate. However, it also carries its own set of risks and complexities. Whether you're a seasoned investor or a first-time buyer, it's essential to be fully prepared—especially when it comes to securing auction property finance.

 

To make smart decisions and avoid common pitfalls, here are three critical factors to consider before making your bid.

1. Do Thorough Research Before the Auction

Successful auction purchases start with solid preparation. Properties sold at auction are generally offered “as is,” which means any issues—legal or structural—become your responsibility the moment the hammer falls.

 

Here’s what your research should include:

  • Review the legal pack – This crucial document provides details on ownership history, existing liabilities, covenants, and legal restrictions. Always read it carefully.

  • Inspect the property or commission a survey – If access is possible, arrange for a survey or inspection to identify structural concerns or costly repairs.

  • Compare market values – Look at similar properties in the area to gauge the true value and avoid bidding above market price.

This article from Savills offers more insights into preparing for an auction.

2. Set a Budget and Arrange Auction Property Finance in Advance

Auction day moves fast, and bidding can get competitive. That’s why having a pre-set budget and pre-approved auction property finance is crucial to staying in control.

Consider the following financial tips:

  • Account for additional costs – These may include a 10% deposit on the day, auctioneer fees, legal expenses, and any refurbishment work.

  • Arrange finance early – Whether you’re using a mortgage or a bridging loan, ensure your lender provides a decision in principle. Auction purchases often require completion within 28 days.

  • Stick to your limit – Emotional bidding can lead to overspending. Determine your ceiling price and stay disciplined.

Need help finding the right lender? Our team can help guide you through your auction property finance options.

3. Understand the Auction Process

No two property auctions are the same. Familiarising yourself with the specific process can prevent costly mistakes.

Key areas to focus on:

  • Pre-registration requirements – Most auction houses require bidders to register in advance and provide identification.

  • Watch a few auctions – Observing real-time bidding is a great way to get a feel for pacing and strategy.

  • Know the timeline – Completion deadlines are strict. Missing them could mean losing your deposit and the property.

This post from Propertymark goes into more detail on how property auctions work.

Final Thoughts

Buying a property at auction can be a smart investment opportunity—when you’re well-informed and financially prepared. Taking the time to conduct in-depth research, arranging auction property finance ahead of time, and understanding the auction process can help you avoid costly surprises and secure a profitable deal.

 

If you want to talk financing a property at auction then get in touch.

Thinking of bidding at an upcoming auction? Get in touch with our expert team—we can help you navigate every step, from finance options to post-auction support.

Because in the fast-paced world of property auctions, being prepared isn’t just helpful—it’s essential.

Accounting / Financial Services

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