It all looks so easy on TV programmes like Homes Under The Hammer, doesn’t it?
But even if we’ve never done it, many of us instinctively know that buying at auction can’t be that easy.
Having said that, I’m still surprised by the number of people I meet who assume that every property at an auction is a bargain, and all they have to do is turn up (or, even better, bid online) and they’ll easily secure the best BMV bargains they ever bought.
I’ve been to buy at auction, prepared thoroughly, done my research, and haven’t even had a chance to bid, as other enthusiastic bidders pushed the price up and over my maximum bid before I even manged to get my hand up.
If I’d paid out on surveys, legal fees (for looking through the legal pack) and mortgage broker fees, as one should, I could have spend a couple of thousand pounds and not even bid.
But frenzied auction rooms can be a great place to sell, and that can be a great strategy as well. or in some market conditions, and even better strategy (than buying).
Whether auctions are the place to buy, or the place to sell, will depend very much on the economic cycle. It’s not like auctions are always good or always bad.
When the next downturn comes, and there are more sellers than buyers, then it will be much easier to buy bargains at auction.
In the meantime, with the right research and preparation, it can be possible to buy a bargain, but do go in with your eyes open and realise that just because it’s in an auction doesn’t mean it’s a great buy.
And be prepared to pay out on fees in advance and still not get the chance to bid.
If you do bid, be disciplined and don’t exceed your maximum bid even if a bidding frenzy breaks around you. You know better than that, and better than the other bidders.
Here’s to successful property investing.
Peter Jones B.Sc FRICS
Chartered Surveyor, author and property investor
PS. By the way, I’ve rewritten and updated my best selling eBook, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same.
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