Hey guys,
today my business partner Russell shares some tips on what to look for at a property at auction and what happened when went to bid on Ribbesford house. Firstly, agree with yourself and your business partner on the type of property that you are looking for and what you are prepared to pay- if you can get it for less, great!
Secondly, ensure you attend an open viewing of the property and to organise your finances beforehand as this will allow for the day to run as smoothly as possible. It is not like a usual property process where you have a longer time period, if you are at auction you need to have everything already in place.
Will I face a problem at auction?
At auction you can be easily swayed to pay over the odds when you are against other bidders. When we went for Ribbesford house our maximum bid was £800,000 and we lost out to the final bidder for £810,000 which was incredibly disappointing, but I made a point to stick to my original decision and not get caught up in the emotions of the auction room.
If we had of won, the next process would have been to put a down payment of £80,000 and then to pay the outstanding in cash or source a bridging loan as you have very limited time to complete after auction so applying for a mortgage is not an option. The following day, I received a phone call informing me that the bidder could not complete the sale. On the spot we agreed on £800,000 as this was my original bid and the price I was prepared to pay.
My top tips for auction would be to thoroughly do your research, organise figures and ensure that you stick to your original price. Going to auction is also a good method of buying with a project you intend to refurbish and refinance to then flip it or rent it out.
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