1. If you are relying on the sale of another property in order to buy, don't bid on a property before you've sold yours i.e. before the completion has happened. You could find yourself having to complete on your auction purchase without the proceeds of your sale. You would then have to take out Bridging Finance to assist you until your first property is sold, with the associated costs.
2. Always set yourself a maximum price limit on the property and stick to it. It is very easy to get carried away at the auction and so it is important that you discipline yourself to only bid up to your maximum. To calculate your maximum, work backwards from the end value, having factored in renovation costs, finance and legal costs and a payment for your time.
3. Always make sure that you get a valuation or survey carried out before you decide to go to the auction and bid. At the very least visit the property with someone who knows what they are doing and can spot potential problems. This way you’ll know what issues the property might have and can factor this into your calculations for renovation costs.
4. If you are new to buying at auction, attend a few as an observer so that you can get a feel for them and the way they work. This way when you actually go along to bid it won’t seem so daunting.
5. Always read the legal pack in advance if there is one, and discuss the contents of this with your solicitor. Make sure your solicitor has checked the Title Deeds and any special conditions of sale.
6. Always view the auction property thoroughly before placing a bid. Buying ‘blind’ is a risky strategy.
7. If you really are nervous about the auction process you could get someone else to do the bidding for you. You can either attend the auction with them or, if you prefer, stay at home and wait for the phone to ring with the news. Either way, you need to give your bidder clear instructions on your maximum price.
8. Pick auctions at unpopular times of the year – such as approaching Christmas or during the summer holidays. There are likely to be less people attending, which could lead to lower prices.
9. Bid with confidence up to your limit. It’s like a game of poker and you can’t let the other side know how strong your hand is.
10. Don’t worry if you aren’t successful. There are plenty of auctions and plenty of properties out there.
