With London property prices being what they are, many house-hunters are coming around to the idea of buying their next home at auction. Stepping away from the conventional purchasing process certainly isn’t for the faint-hearted, but if you’re willing and able to act quickly, heading to auction can be a great way of snapping up a fantastic property at a bargain price.

If you’re new to the auction scene it might seem intimidating, but don’t worry; we’re here to explain the process and help you with everything you need to know before the hammer comes down.

Why do people buy homes at auction?

For most, the biggest draw of buying a home at auction is the possibility of snapping up a great deal. While it’s not always the case, with a bit of research you can often get a property for far less than the rates of those advertised by estate agents.

Another appealing factor is that many of the properties available at auction are unconventional – often too much so for the general market. If you’re looking for a quirky or unique home, an auction hall might be the place to search.

Auction sales are also free from property chains (which are often the most frustrating part of a conventional house purchase), and the sale is legally binding as soon as the auction ends. There is no waiting around for someone else to move out, and no chance of another buyer jumping in.

Why doesn’t everyone buy a home at auction?

Buying a property at auction comes with its own set of perils, particularly if you are inexperienced or tend to get competitive. There will often be a bidding war over an attractive property, and it’s very easy to lose focus of your budget and get carried away when trying to secure a house or flat that you really like. In a conventional sale you are free to try and re-negotiate the price until you exchange contracts with the seller, but at auction, the price that the hammer falls upon is final.

It’s also difficult to gauge the value of a property at auction, particularly if it needs work doing (which many do). Auction catalogues will include a guide price, but this is usually set very low in order to attract more interest, and often has little bearing on the amount a property will finally sell for. As a result, you can spend a lot of time and effort investigating properties you like, only to find that once the auction begins, bidding quickly jumps to way beyond your budget.

What’s the secret to successfully buying a property at auction?

In a word; preparation. If you see a property that you like in an auction catalogue, make sure to arrange a viewing as soon as possible through the auction house. Feel free to go back on multiple occasions (just as you would with a house you found through an estate agent), just remember that you need to be certain that you want to buy it before the hammer falls.

For this reason, you will need to commission a building survey or HomeBuyer Report well before the auction date. If you don’t find out about significant structural defects until afterwards, it’s already too late; you can still back out of the sale, but you will be legally required to pay the full deposit.

It’s worth going to watch a few auctions for properties that you’re not interested in, just to get a feel for how they play out. You’ll soon see that you can ignore guide prices completely, and will get an idea of how bidding wars unfold.

When it comes to bidding for your own property, have a firm budget in mind and stick to it. Even if it seems like “just a bit more” each time, not sticking to your guns is the fastest way to spiral way beyond what you can comfortably spend. Bring at least two forms of identification with you to the auction (you will need them if you are successful), and arrive early enough to find a position where you can easily be seen by the auctioneer.

At Daily Move, we pride ourselves on our flexible surveying services. If you’ve found your perfect home in an auction house catalogue (or think you might do soon), give us a call or send us a message to arrange a fast-turnaround property survey before you commit.