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By Johanna Gardener •
Updated: 12 Nov 2024 • 19:42 • 2 minutes read
Being prepared and getting a good feel of potential homes on auction is a must
Credit:Shutterstock:ChickenStock Images
Buying a home on auction can be a risky decision, but if your mind is made up, be sure to prepare well and do your research before attending any auction event and investing in a property.
For those who have decided to take the plunge and set their sights on an auction property, it is important to hold your horses before going in for the kill. Researching a property is essential and this comes with its own list of homework before you are ready for the auction room.
Check that there are no skeletons in the closet: debts and other legalities
When researching the catalogue or online guide of properties available, it is important to investigate legalities. Check that there are no skeletons in the closet like hidden debts or legal problems that could come back to haunt you later.
Survey the property for renovation costs
If you are able to, check the physical condition of the property thoroughly. Auction property does not usually come with a guarantee or warranty so if possible, try to hire a surveyor to assess the structural integrity of the building. Some properties on auction are old and need extensive renovation work. Although a property renovation project might be exactly what you’re looking for, its important to have an idea of the scale of reforms before splashing the cash and finding yourself out of pocket later on.
Get a feel for the area where you are bidding for property
Organise a visit in person if this is an option before any potential premises goes on auction. Photos can be deceptive and it is a great way to see the condition and surroundings of the property first hand, including noise and light quality. Most buyers planning to purchase on auction, will have a pretty clear idea of their target area. However, visiting several times in person is essential to get a real feel for the place and to check out local market trends and property values. Many buyers purchase property at auction to later resell it for a significant profit margin. Whether this is the case for you or not, having a clear idea of how the market is rumbling in the local area can give you peace of mind for the future.
How to know if a property on auction will be profitable?
You could also consider how feasible the area is for rental opportunities. Understanding the area and what it has on offer is the only way to get a comprehensive full-colour picture of what you are investing in. Local estate agents can give you some idea on the value of similar properties in the area, rental potential and on local property market trends. Whilst in the vicinity, build up a portfolio of the area through checking for local amenities and services schools, public transport, internet connectivity and supermarkets.
Stick to a strict budget on the day of the property auction.
You are feeling good to go and all ready for the big auction day. Remember, a bidding environment is fast, intense and can be stressful. However, if you are fully prepared and with a clear idea in mind about what you want, you will be capable of making shotgun, well-informed decisions that you won’t regret. Go prepared with a strict budget. Under the pressure, competitive tension can escalate and there’s nothing worse than firing above your target. Bid strategically, stick to your budget and avoid going over the limit – even if your dream home is on the line!
Find other articles on Property and investment
Happy bidding!
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Written by
Johanna Gardener
Originally from Manchester, UK and with a degree in English with Modern Foreign Languages, she has been a permanent resident in Spain for the past 12 years. Many of these years, she has spent working as a secondary school teacher, as well as in journalism, editing and marketing. She currently lives in the historic centre of Malaga, where she enjoys writing, walking and animals.
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