How Not to Win in Property Auction: Biggest Mistakes to Avoid
The global financial crisis has brought about many negative consequences around the world such as unemployment and insolvency of even top companies. Even the real estate has experienced the economic turmoil brought about by this crisis.
However, this does not mean that buying properties are completely out of the question these days. In fact, you can take advantage of the low cost of properties today and invest on buying them. You can use this property for your own purpose or re-sell it after the economy is back on its feet and property prices are good to go.
One good way to purchase a property is through property auctions. Propertyauctions co UK are widely popular because this saves you a lot of time and money. Many properties offered in auctions are lucrative real estate investment if you have extra money waiting nonchalantly in the bank. As we all know, properties sold in auctions are often much cheaper than those that are being sold at the general housing market.
If you are completely new in this arena, do not make the mistake of thinking that you cannot do this or that this is something that not is for you. Every experienced bidder began as a novice and at some point thought that this does not suit him. The important thing is that you prepare properly for it by studying the rudiments of property auctions.
It takes quite a while before a novice bidder becomes an expert. Some have to go through various auction mistakes before they learn about the process. Learning by your mistakes is a good way to gain knowledge. In fact, even some property auctions agents learned the hard way. But of course, if possible, it is better to avoid these mistakes to save yourself from the pain and hurt.
Below is a rundown of information on how NOT to win in a property auction. Meaning to say, these are the auctions biggest mistakes that you should avoid.
1. Going to an auction without preparation
Property auctions are thrilling and exciting for seasoned auctioneers. However, if you are new at this, it can be a daunting experience for you. Your cluelessness will show in your face when you enter an auction without proper preparation.
Because of this, it is imperative that you familiarise yourself with the process beforehand. Conduct research about the basic auction procedure and all the other aspects that revolve around it. It would also help to attend auctions as a spectator so you can observe how it works and what happens during one.
For instance, you have to know important things like the difference between guide price and reserve price. The guide price gives an idea on the estimated value of the property while the reserve price is the price that should be reached in order for the property to be sold.
Moreover, you have to be updated with the happenings around the local auction market. It would be better if you know the housing trends not in this country but also in others as well. You may find it useful to know the news in property auctions England for instance.
2. Failing to organise your finances
Organising your finances is of prime importance because you do not want to end up financially impaired. Remember, you need to give a 10% down payment immediately after your bid wins and then you need to pay the balance right after 28 days.
Imagine if you down a £10,000 deposit on a £100,000 property and then you are not able to pay the balance within 28 days, you will lose the deposit you have made just like that.
3. Viewing the property to be auctioned only once
Property auctions catalogue can give you practical information about a property that can help you to decide if it is the one for you. However, you still need to go to the actual site and view it in person so that you can inspect it more closely.
In addition to that, it is not enough that you view the property only once because you will not be able to inspect it in full detail with just one viewing. Do this prior to the scheduled auction day and not on that day or after.
When viewing the property, do not only consider the property but other aspects as well like the neighborhood, vicinity, accessibility, and many others. Moreover, arrange an independent surveyor to do a survey. Although it can be costly, a survey is essential so that you would know how much the maximum price you can bid on the property is.
4. Forgetting about the legal pack
Properties for auction have a Home Information Pack that you should request from the auction house. This way you will know the essential information about the property such as if there are legal problems.
5. Showing everyone that you are nervous and petrified
It is very important that you maintain a confident and assertive aura right the moment you enter the auction house. If you appear nervous and shaky, people will easily recognise that you are a newbie and take advantage of that. If you were feeling that you could not do this, it would help to go to an auction with any property auctions estate agents.
6. Having no idea about phantom bids
Phantom bids, otherwise known as "off the wall" bids are fake or imaginary bids called by the auctioneer from a member of the audience who does not exist or who works for him.
7. Going over your set limit price
Set yourself a limit price and never exceed it no matter what happens. Your set limit price determines the amount that you can afford that will not leave you financially impaired.
It is not really a wonder how property auctions have become so popular. The trick here is that you should keep your eyes peeled and radar on, shop around for a great bargain, and go win the property you have been dreaming of without hurting your pockets too much.
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