Tips for buying an investment property at auction

Buying an investment property at auction can be daunting for a first timer. But it doesn’t have to be complex. We’ve outlined just some of the main tips an auction purchaser should know:

• Do your research. Make sure you have fully looked into a property before making a bid. You need to ensure that you have done your sums and that you know whether you want to purchase the property, and how much you would be willing to pay.
• Stick to your budget. Make sure you have a plan for the day of how much you are prepared to bid for the property. You need to make sure that a transaction makes financial sense and that you are not paying more than you think it is worth.
• Have finance prepared in advance. If you win the property at auction you only have a short window (usually 28 days), to complete the purchase. Therefore, you need to make sure there are no surprises. If you need finance to help you complete, it is better to have this lined up in advance, rather than waiting until you are committed and running into potential problems.
• If in doubt, don’t commit! If your bid is successful then you are due to pay your deposit. So, if you are unsure and risk pulling out of the deal, then you are likely to lose this – which is usually 10% of the purchase price. So make sure you are in a confident position to put up your hand!

If you want to find out more about how property auctions work, or to speak to someone about arranging finance, you can contact your local ASC director below.