Property auctions
Get list of property auctioneers and get a list of the upcoming property lots. Get the particulars of all the ones that you like the look of and go and visit them. You can ask whatever questions you like of the auctioneers who are under a duty to give you truthful answers. You lawyer can give you advice on the questions to ask.
We strongly advise that on your first property auction you don’t buy anything! Just use it as a fact finding trip on how the process works and what sort of prices you can get. If you do bid on anything then remember the golden rule that “when the hammer falls the property is yours!”. This means that you must have the funds ready to complete the purchase.
Note down the prices that other properties have gone for and you can use this as ammunition against any sellers of similar properties in the area which you may be interested in buying.
If you are serious about buying at a property auction then you need to make sure that you have completed thorough legal due diligence and have a sound survey. There is no time to ask questions after the hammer has fallen.
One sneaky tactic that we have used before is to ask some predudicial questions while the auction is taking place. It requires some guts but when you do it the rewards can be substantial. Here is an example of how it works…
Before the auction you have done your homework on the property that you are interested in. You find a few negative things about the property such as some structural issues and some a local planning application for a nightclub nearby.
You have fully investigated these and are happy that they are not a problem. However you decide that as the caring conscientious person you are some of the buyers in the auction may not be aware of the issues and may like to know!
When the auctioneer gets to your property you put your hand up and ask if you may ask a quick question. The auctioneer should let you speak and he knows if he doesn’t it will cause concern amongst the rest of the bidders. If he/she tries to palm you off then just say you have found a couple of issues at the last minute and would his/her views on them. If he/she still resists then just get him to ask the rest of the auction house if they would like to hear your question. Other potential bidders will undoubtedly say yes.
The auctioneer is under a legal obligation to answer your question truthfully. You then decide to ask a question like:
“We noticed that there was some structural damage in the walls of the sitting room. Do you know how much it would cost to repair? Also, we were wondering whether you had any further information on the progress of the nearby nightclub planning permission and what hours in the morning they are applying for their licence?”
The auctioneer will invariably not have the answers to your question and so he/she will answer with “I don’t know”. This will cause concern amongst people who were going to bid on your property and may make them lower their bids or even better, not bid at all.
We have seen this in action at a property auction and the price tumbled from a market price of £190,000 to £151,000!
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