Key Insights from industry expert David Sandeman
Auctions have always been seen as the place where great deals can be purchased, but how do you maximise your chance of getting one of the great deals and not spend it all chasing 'no hoper's'?
5 Strategies for making money when buying property at auction
1. Look for lots being offered by an auction house well outside their area
Especially if they are a regional auctioneer. They probably won’t have a big following in in that area, and if they don't, you will have less competition bidding on the lot.
2. Look for a lot type not normally offered by that auctioneer
If they are say predominately a commercial auctioneer and they have a residential lot (outside their area even better) then again, they might have less interest in the lot than a residential auctioneer located in the town.
3. Try an offer prior to auction
If you see a property you like the look of, try an offer prior to auction. It will normally have to at least be at 'guide plus'. If accepted you will be under pressure to attend the auctioneer's office to exchange contracts. Before you do that, you will need to be completely comfortable with the legal and physical condition of the property and happy to exchange and whilst doing this due diligence, the vendor could change their mind for whatever reason, so don’t delay.
The benefit of buying prior is that if you are successful you would have carried out your due diligence and secured the property at a price that is good for you with the certainty of not being outbid at the auction.
4. Withdrawn lots
On average about 8% of all lots are withdrawn, this could be because the vendor no longer needs to sell it or the legal documents are not available or it was offered vacant and the tenant has not left, or a million and one other reasons. If you see a property you like (and our site will advise you of them) and it is withdrawn ask the auctioneer why and register your interest. It may be the reasons it was withdrawn will be sorted out soon, but not before the auction and the auctioneer may well call you when the issue is resolved to offer it to you without the competition of a later auction.
5. Unsold lots
Currently 25% of all lots don't sell at auctions. In some cases, these could be considered ‘orphans’, with no home to go to. Let's consider the vendors position: He put it to auction so is probably a motivated vendor. He didn't sell it prior, and he didn't sell it in the room. Where is he going to go? If you show interest in it he will definitely want to have a discussion with you via the auctioneer about you buying it, try an offer based on the Guide Price, you can always go up.
The best way forward
Firstly, you need access to eigpropertyauctions.co.uk, as this is the only site with information on virtually every lot coming to auction and the price achieved for those already offered. In a nutshell, without the knowledge you will get from our website you will be in the dark. You will not have full visibility of what is coming up for sale and you will not know what similar properties have sold for!
To remind you of a famous quotation: "In the land of the blind, the one-eyed man is king"!
With access to our site you will have two eyes and not just one!
Experience your FREE no obligation EIG trial now, call us to get started: 01737 226150
By Beth Fox