Buying a property at auction? Then don’t forget these vital steps

From prime property opportunities in the heart of London to new-builds and traditional homes in rising regional hotspots, it’s easy to see why foreign and domestic investors are enticed by real estate investment. And in a market that has proven resilient despite the uncertainty caused by Brexit, competition is rife – the need to identify and quickly complete on a property purchase is more important than ever. This explains why bridging finance has become a popular option amongst borrowers in recent years.

To stay one step ahead of the competition, prospective homebuyers are now more willing to consider the more non-traditional routes towards property ownership, such as auctions. As a result, here at Market Financial Solutions there has been a noticeable influx of interest from brokers and private clients seeking bridging loans to finance their next real estate investment.

Having served the specialist finance needs of brokers and borrowers for over a decade, Market Financial Solutions proudly boasts a network of industry professionals with a keen perspective on the property market.

Having heard some of the common questions brokers face when supporting clients at a property auction, we called upon Stuart Elliott from Network Auctions to hear what he considers to be the quintessential property auction checklist.

Stuart Elliott: The property auction checklist

Having worked in the property industry for nearly 30 years, Stuart has seen first-hand the changing nature of real estate auctions. As a Fellow of the National Association of Valuers and Auctioneers, Stuart believes that when it comes to successfully bidding on a property, buyers need to follow a six-point checklist:

  1. Always view the property – you would be surprised how many people don’t!
  2. Do your research and understand what the market value of the property is by consulting with agencies and online property portals.
  3. Always download a copy of the ‘Legal Pack’from the auctioneers’ website. Read it, or if you are new to auctions, instruct a solicitor to check the legal pack on your behalf. This contains all the legal information relating to the property and any additional costs that the purchaser will be liable for. These additional costs will be stated within the ‘Special Conditions’ of the legal pack. Purchasers should be aware that it is their responsibility to read it as the contents are legally binding.
  4. If finance is required to purchase the property, inform the lender of the time scale required for the funds to be deployed. Remember, the purchaser must provide a 10% non-refundable deposit on the day of the auction, and complete in 20 working days.
  5. Successful bidders are charged an administration fee by the auction company so be sure to check the amount. This typically sits around £750 (plus VAT).
  6. Have a maximum price you are prepared to bid to on the day of the auction and stick to it.

 

 

If you want to find out more about MFS and how bridging finance products can support you or your clients purchasing a property at auction, speak to a member of the MFS team by emailing enquiries@mfsuk.com or calling 020 7060 1234. Alternatively, you can download a copy of MFS’ bridging loan product guide, which has more information about our services and products.