Unlike the professional buyer whose profit margins will dictate when he should quit, those who intend to live in the property will go that bit further.They have already set their hearts on a place and have invested time and money in preparing for the sale. They are not likely to be alone though. The major auction houses have all seen an increasing number of ordinary buyers and it is not unusual to have 50 people viewing a property at one time. Nor is it rare for properties to be sold prior to auction at a good price. James Coker of Edwin Evans auctioneers says that private clients asking for lists have been melting the phones: "We now have telephone bidding which makes the process more attractive to people who cannot afford the time to attend."
Although the public perception of buying at auction has changed and it has become a valid way of acquiring a home, in some people's mind the notion still lingers that it also a cheaper way. The flood of building society repossessions which dominated this market in the early Nineties confirmed the impression that there were good deals to be had. And even now, in a rising market, some distasteful advertising of repossession lists suggests there are rich pickings. These lists are costly and generally out of date. Some agents, it has to be said, are also keen to point out the profit buyers have made out of a repossession. All this adds up to an impression that auctions mean bargains. Far from it. Certain types of property do better at auction than through an agent and it is certainly not a choice of last resort any more than it is a dumping ground for repossessions.
Black Horse Corporate Property Services act for a range of different lenders in taking responsibility for repossessions. Mike Spencer, the general manager, is aware that they have a connotation of discount, but is clear about the duty to market a property effectively. "People are wrong if they imagine they are going to get a bargain. We have a best price policy. Certainly none of the major lenders would wish to see a property advertised as a repossession." The kind of property that most ordinary buyers are interested in at present is the unmodernised houses and flats in good, well-established residential areas. The wreck of a cottage with holes in the roof and no running water has always been auction fodder with limited appeal, but the prospect of a structurally sound house that needs bringing up to date is a manageable project. It is also likely to meet the criteria of banks and building societies who are extremely pedantic when considering applications these days.
Chris Berriman, a partner at Allsop, the auctioneers, has seen prices in this section go well above the guide. In the October sale, a Richmond house they expected to sell for pounds 100,000 went for pounds 127,500. "One of the chief attractions of buying at auction is that when the hammer comes down the property is yours. People are fed up with gazumping and chains and they like to know where they are. It's good fun too." The excitement of bidding can quickly turn to dismay for those who are forced to withdraw. They see money spent on surveyors and solicitors go down the drain and the house they imagined as theirs move out of reach. Those tempted to carry on bidding must remember that when the hammer falls, there is no going back. James Coker recalls one couple who had a costly lapse of concentration. "They thought they were bidding for a flat, but found themselves owing a 15ft triangular piece of shopfront. They had to complete."
Edwin Evans (0171-228 5864). Allsop (0171-494 3686). Dates of public auctions are published in the Property Bid List, Faxwise Auction Information Service, local and trade press.
from James Coker of Edwin Evans
Attend a couple of auctions before attempting to buy and view a selection of properties.
When you have decided on a property take catalogue details with the auction date to a solicitor. There may be only two or three weeks in which to complete legal inquiries. The auctioneers often have packets of documentation.
Get a structural survey or home buyers report. Financing must be agreed before the auction. You will have to pay a deposit there and then and the contract is binding. Keep in touch with auctioneer.
Listen to any announcements at the start of the auction. Take a solicitor with you. Make sure the property you buy is insured immediately. If the property has not sold leave your highest bid with auction room staff.Reuse content