The Process, Legalities And Pitfalls Of Auction Accommodation
Are you tempted to buy your next home at auction? There are many advantages to doing so, but you need to be careful and have a great legal advisory team in place.
Buying property at auction may not be the traditional route to purchasing a home, but it can certainly snap you up a bargain! Spring is a fantastic season to find a new home and under the hammer is a great place to start. But buying a property at auction requires you to have an understanding of the process, the legalities and the pitfalls of this type of purchase. Follow this guide to learn what happens on the inside of an auction house.
Conduct Your Research Beforehand
One of the greatest differences between buying a property at auction or via the traditional route, is that as soon as the hammer falls then the legal contract you’ve entered into is binding. This means that you should carry out any desired property visits, surveys or building quotes before attending the auction, so that you’re fully aware of the state of the accommodation you’re interested in buying and that there are no nasty surprises waiting for you once you’re locked into a legal agreement. Properties which go to auction are quite frequently in need of modernisation, so it’s best to have an accurate idea of the amount of money you’ll need to stump up for maintenance, or indeed to make the accommodation habitable.
Choosing A Suitable Conveyancing Team
Buying property at auction requires a law firm with excellent knowledge and experience of this specialist area of conveyancing. According to a property solicitors Essex team, the auction house will provide you with a legal pack prior to the sale, so you should have your solicitors look through the small print, plans and your survey details to advise you on any anomalies that may crop up so that you know exactly what you’re investing in.
Funding Your Auction Property
One of the major advantages of buying a property via auction, is the speed at which the sale goes through. As soon as the hammer goes down, you’ll need to pay your 10% deposit upfront and the balance of the property will be owed a maximum of 28 days later. This will only be 20 working days to get everything sorted, so it’s always best to arrange your mortgage funding in principle before attending the auction so as to ensure you’re able to pay what you’ve promised. In the event that you can’t get your mortgage rushed through, you may be eligible for a bridging loan which is a suitable option for the short-term but does come at a high-interest cost.
Arranging Insurance
As soon as you’ve paid your deposit, you become legally responsible for the property, which means that you should put immediate buildings insurance protection in place, so as to safeguard your investment in the event of fire, flood or storm damage.
Purchasing a property at auction can provide you with a tremendous bargain as well as being a quick process, but the onus really is on the buyer, and their legal team, to do the necessary preparation to ensure that the process is a success!