Posts with tag: auctions

Take the Plunge with Buying at Auction – Getting the Basics Right

Published On: May 24, 2019 at 10:01 am

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Categories: Landlord News

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By Matthew Tooth, the Chief Commercial Officer of LendInvest

There are many ways of buying an investment property in the UK, from a private sale through to the traditional method of using an estate agent. Among the most popular for property investors, however, is the auction. It’s been a very busy time recently for auctioneers. In April alone, there were over 100 property auctions held across the UK. Dating back to Ancient Greece, it seems nothing beats the adrenaline inducing finality of the fall of the auctioneer’s hammer.

There are several advantages of buying at auction. There’s the opportunity for a bargain, the transparency and level playing field of the bidding process, and the speed of the transaction once the hammer falls. The disadvantages lie in not always getting what you bargained for and paying over the odds by getting caught up in competitive bidding.

The risks, though, can be overcome with some proper preparation and planning.

This article will help those relatively new to the auction process with deciding on the property, preparing to bid, arranging the finance and completing on the deal.

Preparing for buying at auction

If you’ve never experienced an auction before, you should familiarise yourself with the whole process before contemplating making a bid. We suggest you find a couple of auction houses in the area that you are considering purchasing in and get on the mailing list. Their websites are likely to offer previous auction results and the prices being achieved. In this way, you will get a feel for the type of properties that come up and at what frequency.

Go and view a couple of properties that are being auctioned. Get a sense of their condition and how well they match the descriptions. Then go to watch the auction itself: see how the process works and what your test properties sell for on the day. You can repeat this process as many times as you need until you feel entirely at home in the auction environment.

Preparing to bid

Your training completed, you should now feel ready to start preparing to bid for real.

Study the catalogue and be laser focused on the types of property that appeal to you. Do your research on a property before considering bidding on it. Go and view it, get a builder, surveyor or architect to advise on the costs of development and any hidden issues, and read the legal pack. The legal pack is important, because it includes information such as searches, title deeds, leases and any relevant planning permissions. The legal packs are available online and can be downloaded free of charge.

Now would be a good time to line up your solicitor. You’re going to need to complete very quickly if you’re successful on the day, so knowing who you are going to use is one less thing to worry about, but, more importantly at this stage, your solicitor can look over the legal pack for you and point out anything that needs attention.

Take the Plunge with Buying at Auction – Getting the Basics Right

Also, think about arranging your finance, at least getting an offer in principle. You will have a legal obligation to complete on the purchase, so you need to be very confident that you have the money you need.

At LendInvest, we lend to experienced property professionals, supporting purchases with finance for auction properties from £75,000–£7.5m at a maximum loan-to-value (LTV) of 75%. 

Making an offer before the auction

With the property viewed, its potential and development costs assessed, your legal team lined up and finances arranged, you could consider making an offer before the auction to get it removed from the catalogue. This happens more than you might expect and explains why you see properties listed as “withdrawn by seller” on the day.

On the day

Assuming you decide to let the property go through to auction, hopefully your preparation will now pay off. Remember that you will need a 10% deposit and two forms of ID if you make a winning bid, so make sure you bring these with you. Try and get to the auction house early, and choose a seat where you will be able to see the other bidders and also hear, and be seen by, the auctioneer.

When your chosen property comes up, always keep your budget and maximum bid in mind. If the property goes to another bidder, it goes. There will always be other opportunities. 

If you do miss out, don’t make a snap decision to start bidding on another property. Remember, you did all that preparation for a reason. When you’re bidding, keep in mind that Stamp Duty and possibly VAT will be payable in addition to the bid price, as will the auction house fees.

After the auction

If you win, the property is technically yours when the hammer falls. You will need to pay the 10% deposit immediately and will typically have 28 days to complete the purchase.

You should finalise your finance and instruct your solicitor to get moving on the completion formalities. We also recommend arranging insurance, as it will be your loss if the building is damaged from this point forwards.

You will lose your deposit and the property if you don’t complete the purchase in time, and you could also be liable for the remarketing costs. The commitment you make on the day isn’t just an offer that can be withdrawn; it is binding and cannot be taken lightly.

Landlords, Find Your Next Property Investment with Repolist

Published On: September 15, 2016 at 11:02 am

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Are you looking for your next bargain property investment venture? Then look no further! Landlords can find great value for money with Repolist.

Landlords, Find Your Next Property Investment with Repolist

Landlords, Find Your Next Property Investment with Repolist

Repolist is the UK’s leading real-time database of repossession, refurbishment and auction properties.

It analyses hundreds of thousands of properties for sale nationally, cataloguing them into a real-time, searchable database. Refurbishment projects and repossessed properties generally offer investors a bargain purchase.

Although all of the properties on the site are available through traditional high street estate agents, Repolist cuts down the amount of time and energy it would take you to find them. Property investors can browse investment opportunities instantly, at the click of a mouse. The Repolist database is also updated in real-time, so the information is as up to date as on other property portals.

Repolist also announced last year that is has teamed up with Zoopla. The site now takes a direct feed from the portal, as well as other major sites, meaning that Repolist now has one of the most comprehensive systems for identifying bargain properties in the UK.

Subscribers can enjoy a huge database of properties available across the country. Repolist also has an email alert system that delivers almost every refurbishment property on Zoopla to your inbox.

Property developers looking for much sought after plots of land can also search for potential sites on Repolist.

The site has the largest selection of land plots, refurbishment, auction and repossessed properties for sale in the UK.

The properties are organised in an easy and simple way, meaning that you can browse for properties in exactly the same way as you would on any major property portal.

It provides full and complete property listings, with full contact listings. There are no reservation fees or middlemen to complicate the viewing or purchase process.

Subscribers have access to over 15,000 real-time auction, repossession and refurbishment properties. Property investors can subscribe to Repolist for £89.99 per year – around 80% cheaper than competitor sites. Sign up here: http://www.repolist.co.uk/users/sign_in

Landlords, can you use Repolist to find your next property investment?

Is This the Cheapest Property in the UK?

Published On: May 7, 2016 at 8:43 am

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At a time when the average house price is almost £190,000, could this flat in a North Lanarkshire village be the cheapest property in the UK?

The three-bedroom flat in Upperton, near Airdrie, is on the market for just £1.

With everyone else in the country struggling to save for the average home, costing £189,901, could the buyer of this property be onto a winner?

Although the rundown apartment needs “significant upgrading”, Auction House Scotland claims it offers “huge potential for development”.

The flat is set to go under the hammer at an auction in Glasgow, with a guide price of just £1, later this month.

The firm expects a buy-to-let landlord to snap it up.

The Director of Operations at Auction House Scotland, Gillian Cochrane, says it is not the first property they have advertised for £1.

“We have done it once before and the flat sold for £14,500 to a London-based property manager,” she remembers. “It’s not a strategy that we’d use for all types of property.”

She adds: “It’s very rundown and the seller is desperate to get a quick sale – it’s a one-off.”1

The top floor flat in Dervaig Gardens has a shared balcony, communal gardens and on-street parking.

A similar property on the same street sold for £25,000 last year.

Although it seems that you’d really have to do your research with this property, could its super low price encourage you to make your first investment in buy-to-let, or expand your portfolio? There’s no doubt that you’ll make healthy returns!

1 http://www.bbc.co.uk/news/uk-scotland-glasgow-west-36202983