How To Buy Renovation Property At Auction
Buying a renovation property at auction can be a risky investment. However, if you get the right deal and complete the renovation successfully you could end up with a property that will be worth much more than the original purchase price. There is no need to feel intimidated by the auction process because it is a simple operation to navigate your way through the process as long as you do some research about any potential problems.
If you are confident that you can either complete the renovation yourself or have at your disposal a team of workers that you trust, buying and restoring an auction property can be a satisfying project that will ultimately make you money. There are plenty of properties available for conversion including old farm buildings and antiquated bungalows. Not all buildings sold at auction have serious problems although most need some renovation work to make them suitable to live in or for resale.
Finding Auction Houses Which Sell Renovation Property
If your budget is low you may be looking for a cheap renovation property at auction so where do you start? There are several places where you can begin your search. One good resource is the local estate agents who often have a list of run down properties that they do not include in their window display. Some estate agents actively go looking for property that is currently awaiting probate. Many properties that have recently become empty due to the death of the owner are in need of modernisation and a lot may not have been advertised. Additionally, executors who wish to sell a run down house quickly often put them up for auction.
Online auction houses and those with a high street presence are other sources of renovation properties. Many auctions happen either monthly or quarterly with properties being listed in a catalogue well in advance of the auction date. The more resources you try the better chance you have of finding a good renovation property at auction.
Preparing For The Property Auction
It is something of a gamble to attend an auction without doing any preparation. Even if you have found and set your heart on a particular property it is still a good idea to look at the catalogue and see if any other property could meet your needs.
Never bid on a property without doing a viewing where you can find out more details and check out the neighbourhood location. Unless you are planning to do the renovation yourself take along a builder, architect or civil engineer so that you are getting some professional advice from the outset. You can also compare the guide price with other renovation property at auction. A successful bid at a property auction is often down to diligent research and keeping a cool head.
How Do Property Auctions Work?
Auction houses regularly publish catalogues which show all the properties that are being offered at the next available auction date. The catalogue will list properties, most of which have a guide price, and the terms of the auction are also published. You will be given information that shows details of any conditions of sale for each property along with any planning permission that is already in place.
Never bid on a property that you have not thoroughly researched and be aware that once the gavel has fallen after your bid you will be liable to immediately pay the deposit. Completion of the sale is generally 28 days after the auction. At some auctions you may be able to make a successful bid to buy before the auction. If the property remains unsold you can try to make an offer at the end of the auction. Successfully buying a renovation property at auction is sometimes a matter of perseverance and luck.
Renovation Property FAQ
Why Are Renovation Properties Sold At Auction?
Many properties in need of renovation are put up for auction because the seller wants a quick sale. Sale at auction is usually completed within 28 days. Properties that have been repossessed are also often sold at auction and there are some properties that are in need of extensive renovations and have not sold on the open market.
Can I Get A Mortgage On A Renovation Property At Auction?
If the property has had a survey you may be able to secure financing to buy at auction. You will need a 10% deposit available on the day of the auction. Some banks and finance companies specialise in providing mortgages for auction properties.
Are There Any Additional Fees For Renovation Properties At Auction?
In addition to the 10% deposit you may be liable for a buyers fee when buying a renovation property at auction. Each property is issued with a legal pack and any special conditions and fees will be published in the pack. Consulting a solicitor to check out the legal pack will ensure there are no unpleasant surprises.
What Is The Best Type Of Renovation Property To Buy?
Location is often more important than the type of building when buying a renovation property at auction. However, you could find a really unusual building like a chapel or a water tower that would make a great home. Auctions sell all kinds of properties so you could find mixed use properties which combine living accommodation with a business.
Alternatively, you could opt for a piece of land with a run down outbuilding which could be renovated and make you money. As long as the planning permission is in place, buying a rundown property can be a good investment. Ultimately, there is no perfect type of renovation property and each case should be judged on its merits.
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Do I Need Planning Permission To Renovate An Auction Property?
Planning permission is granted by the local authority for extensive changes to property. Location is an important factor so if your property lies in an area of outstanding natural beauty there may be restrictions on what can be done.
Small renovations like changing windows and doors, changing bathrooms or kitchens and building a porch do not usually require planning permission but it is best to check with your local authority.
For extensive renovations planning permission is usually required. If you are buying a renovation property at auction and it already has planing permission be sure to check the expiry date. Planning permission can run for three years but an extension may be allowed if the work is under way.
How Difficult Is It To Renovate An Auction Property?
Getting planning permission is the first step towards making a success of a property renovation. The next action is to make a plan about how and when the necessary work will be carried out. Unless you plan to carry out all the work yourself, choosing a builder and other tradesmen to help with the renovation is essential. If not already carried out, a structural survey should be done before work commences.
Remedial work on problems like damp and drainage should be at the top of your list of first tasks. After carrying out any major rebuilding, fixing the roof and installing insulation, you can fit new doors and windows. Following that the cosmetic work can start with re-plastering, fitting a new kitchen and bathrooms and final decoration. Remember to have a budget in place although it is wise to also be prepared to go over the initial budget.
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