Property auctions have long been an exciting and lucrative avenue for both seasoned investors and first-time buyers, and they have only gained in popularity. However, there are still a few lingering misconceptions that might be holding potential buyers and sellers back from taking part. We think it’s time to lay down the facts and dispel some myths about the world of property auctions.
1. “Auctions only feature distressed properties”
One of the most common misconceptions about property auctions is that they only feature homes that require a lot of renovation or aren’t fit for immediate habitation. While you will see a few renovation properties in an auction catalogue, which are popular with investors, that is far from the only lot you’ll find. Property auctions boast an extremely varied selection of properties, from luxury houses, plots of land, garages, commercial properties, and ready-to-move-in homes ripe for first-time buyers. You’re unlikely to find a wider and more diverse collection of properties, all available at the same place.
2. “Property auctions are only for seasoned professionals”
There is an assumption that property auctions are inaccessible for anyone but those in the know in the industry, and that you need plenty of experience to ever come out on top in a bid. When in actuality, property auctions are open to anyone at any skill or experience level. The rise of the online auction means you can take part anywhere at your convenience without having to take the whole day off to take part, while also not being intimidated by a room full of buyers. It’s never been more accessible for those interested to take part!
3. “I won’t get a good price for my property at auction”
People often assume a property sold at auction will go for less than its value, when really properties can achieve market value or even higher. Bidding wars can also raise the price far beyond prediction. Before the auction, the auctioneers and the seller will agree a guide price and a reserve price. The reserve price is the amount the property must reach to be sold, and the sale will not go through if it doesn’t reach it, even if there are bids, so the seller will never lose out in a sale.
4. “You can only buy properties blind at auction”
Some people are put off auctions by the thought of buying a property without knowing enough about it or being able to give it a proper inspection. When in fact, you not only get a thorough legal pack, video tour, and internal photography of the property, but auctioneers also provide any potential bidder the ability to visit the property beforehand. Viewings are held in blocks, where interested bidders can view the property at an allocated time with other bidders. Sellers can view the property multiple times before the auction if they so wish, or send a proxy on their behalf.
5. “Auctions are only for cash buyers”
It’s not solely cash buyers that can take part in a property auction, and you don’t need to pay upfront. There is a large number of buyers, especially first-time buyers, who successfully purchase a property with financial aid. Network Auctions also provide a product, Rightbuyer, that allows an additional 6 weeks between exchange of contracts and payment.
Property auctions are a dynamic and accessible way to enter the real estate market or expand your investment portfolio. Remember, success in auctions often comes down to research, preparation, and a clear strategy.
