Ask Jackie: What does a first-time buyer need to know about buying a house at auction?
What does a first-time buyer need to know about buying a house at auction? There are two important phases - before the auction, and on the day.
Before the Auction
The first and most important thing to do is to have the finances in place for the specific property you'll be bidding for. On the fall of the hammer, an unconditional contract exists which obliges the successful bidder to pay over 10 per cent of the price bid immediately. If you can't then complete the deal, your deposit will be forfeit, and the vendor could pursue you for the balance.
You must assume that the property will sell for between 10 and 20 per cent over the guide price.
During an auction, agents are likely to raise the guide price in line with the interest in the property. The reserve is generally set by the vendors and the auctioneer immediately before the auction.
The second most important thing you should do before the auction - is getting the survey done, whether by an auctioneer, builder, or surveyor. Only an expert can say for sure if there are non-visible problems.
Before the auction, you should also get your solicitor to check out the "conditions of sale" of the property.
SHORTLY before auction day, you can try and gauge how many people are interested in "your" house by asking the agent how many people have asked to see the conditions of sale. You should let the selling agent know if you are interested in the property because they should let you know if a pre-auction bid is being seriously considered.
On the day
You should fix the maximum price you are willing to pay for the property. A useful exercise is to write down the guide price, and go up in units of €5,000 until you get to a figure you know you really have to stop at.
Then the big moment arrives - the five minutes to half an hour that could change your life.
Jackie White is the owner of Raymond White Auctioneering, Ballymahon. Email: email@example.com Tel: 087 133 4099
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