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Auction Properties in Scotland – An Essential Buyers Guide
Buying auction properties in Scotland is becoming more and more popular. According to the recently published data, they have increased from 15,000 sales a year in 1998 to 35,000 annual sales (2019). Having said that, buying an auction property is not for everyone. Whether to opt for this method depends on your character, your financial circumstances, and your personal situation. Before deciding this is for you, do your research and consider its advantages and disadvantages.
Why Buy Auction Properties in Scotland?
Buying a home in Scotland differs from the way things are done in England and Wales. Estate agents are rarely used. Instead, homes for sale are both marketed and sold by solicitors through a ‘closed bids’ system. You settle on a fair evaluation of the property through a discussion with your solicitor. However, you do not know what bid other prospective buyers are prepared to offer. You might miss out on your dream home by falling short of a couple of hundred pounds or pay over the odds.
By contrast, property auctions are transparent and above board. You know exactly what others are bidding and so can up your bid or drop out whenever you like.
With rocketing property prices down south, Scotland has become a popular choice for people wishing to escape the rat race and who want a better quality of life for both themselves and their families. With an improved transport system, it is possible to adopt a more flexible work routine using a combination of video conferencing and/or commuting.
Apart from permanent relocation, others look at houses sold for auction in Scotland because they wish to buy a holiday home or are looking for a bargain investment for rental purposes. A combination of both is possible if you wish to arrange short-term lets while your second home lies vacant. If this is your reason for choosing Scotland, you should make sure you understand how the LBTT (Land and Building Transaction Tax) works. This Scottish equivalent of stamp duty is liable on any second home or buy-to-let property which is worth over £40,000.
Auction properties in Scotland - Your questions answered
How Much Are Auction Properties in Scotland?
The prices of auction properties in Scotland will generally be lower than the equivalent in other more populated areas of the UK. However, the catalogue guide price is not necessarily how much it will sell for as this depends on how many people are bidding on the property. It also depends on what kind of property you intend to buy.
Where Is the Best Place to Look for Auction Properties in Scotland?
If you are looking for auction property in Scotland, you can visit the websites of local auction houses. When visiting the websites of larger auction houses, such as those based outside Scotland, you can refine your search by specifying which part of the UK you are interested in buying property. Property auctions in Scotland are commonplace and a popular way of starting a property portfolio.
Is Scottish Property Law Different to the Rest of the UK?
Yes, it is. Scotland is by legal definition a different country and although part of the UK, has its own laws, including property laws. If you are seriously considering bidding on a property being sold by auction in Scotland it would be wise to employ a Scottish legal adviser or solicitor who is familiar with the Scottish property market.
How To Find an Auction Property in Scotland
Apart from researching on the internet such as visiting auction property portals, you should also contact auction houses. London auction houses often have lots from across the entire UK while Scottish auction houses tend to specialise in local properties. You should ask to be added to their mailing list so you can see which properties are coming on the market. Checking out forthcoming houses to be sold at auction and their guide price will give you information about how much you should expect to pay.
If you are interested in a second home and/or buy-to-let property, you might not be familiar with Scotland. However much online research you do, this is no substitute for paying a visit in person to the towns/neighbourhoods you are interested in. Ideally, this should be done at different times of the day and in different seasons.
For any property purchase, make a checklist of which features and/or facilities are important for you. More refined search parameters on property auction house websites allow you to find a close match to what you are looking for. Group viewings are arranged by the auction house at set times/days while some vendors allow individual viewings by appointment.
Preparing to Buy Properties Put Up for Auction in Scotland
Once you have found your ideal home among all the auction properties in Scotland on sale, it is time to do a more detailed investigation.
Another way that Scotland differs from the rest of the UK is that people selling homes in Scotland have to prepare a home report. This set of documents comprises of:
- A full property survey
- An energy report on the property
- A property questionnaire (with details of the property’s history)
Do your own research on the property too
Despite being provided with a survey in this home report, it might not be as thorough as you would like. For this reason, you should arrange to have the property surveyed for any potential structural issues or underlying problems. Which type of survey you opt for will chiefly depend on the age and condition of the property.
This is also the time to instruct a solicitor. Because of the legal differences between Scotland and the rest of the UK, it is recommended that you opt for a local solicitor. Not only will they have in-depth knowledge and experience of the local market, but they will also be able to advise you about any unique conditions of sale in Scottish law in relation to auction properties in Scotland.
You should also make sure that your auction property financing is in place. If you need a mortgage, you should have applied for a MIP in plenty of time. Your mortgage provider may accept the information supplied in the home report instead of carrying out a full evaluation and survey. You should also ensure that you have 10% of your maximum bid. This deposit has to be paid as soon as the hammer falls on your winning bid.
How to Buy Auction Properties in Scotland
Property auctions in Scotland do not differ from the rest of the UK. You could attend the property auction in person, arriving in plenty of time. Check beforehand what forms of ID you need to bring with you. If you make arrangements with the auction house, you could also bid by phone, over the internet or by proxy. If you decide to go in person, choose a seat where you have a clear view of the auctioneer as well as rival bidders. You signal your bid by raising your hand, the catalogue, or a numbered paddle / card you are given upon registration.
If you cast the wining bid, an auction house employee will guide you through the financial arrangements and your signature on the missive (or sales contract). If you are outbid, then you will have to begin the process all over again, but with a better understanding of how to buy auction properties in Scotland.
Useful resources for buying auction properties in Scotland