Buy a home at auction
Although the average house price in the South West fell by 5.4% in the first quarter of 2009, the average cost of a home in the region is still just over £200,000, continuing to make home ownership a distant dream for many first time buyers and local people.
Perhaps grabbing a bargain at auction is something prospective homeowners with a tight budget should consider. Properties that need to be sold quickly are often up for auction, and the seller usually wants to grab as much cash as they can get as quickly as possible, perhaps because the property is a repossession, needs renovation or structural work or is difficult to sell.
If you feel like taking a gamble at auction, it’s advisable to view the property you’re interested in and organise a survey and mortgage in advance, because once the hammer has fallen you’re legally committed to the purchase and a deposit is payable on the day. The seller completes immediately, and the balance is due within 28 days.
The auction room has an electric buzz in the air, with first time bidders and private individuals setting themselves against experienced property developers, so you need to be cool and calm with a strict spending limit rather than get carried away by the excitement and over stretch your purse. If your chosen property needs structural work or renovation, make sure you’ve set a realistic budget for this, including a reserve fund for hidden extras, which can often crop up, especially if you’ve never undertaken a project before and don’t know what to anticipate.
It’s wise to spend some time finding your local auction houses, putting yourself on their mailing lists and reviewing their catalogues before you take the plunge and select a property. Attending a few auctions in advance will also help prepare you for what to expect at the event. Be prepared to act quickly and have all the advance information and arrangements in place in time for the auction.
And remember, there is never any guarantee that the property of your dreams will become yours, as sale prices can be unpredictable depending upon how much competition you have on the day.