Going, going... gone!

The experts at Belvoir Lettings reveal the dos and don’ts of buying at auction

What mistakes do buyers often make at auction? How can you spot a bargain? And, how can you ensure that you’re investing in a money spinner NOT a money pit? Here, the experts at Belvoir Lettings reveal all...


“The main problems buyers seem to have at auction stem from lack of research beforehand, bidding excitement resulting in paying too much, not sticking to their budget, and not factoring in renovation costs, timescales and market forces,” says Gary Legge, proprietor of Belvoir Bourne. “Buyers need to ask themselves why the property’s up for auction too.”

Before hearing the gavel go down at auction it is essential to be fully prepared. Study the auction catalogue, visit the property you’re interested in if possible and set yourself a realistic budget… and stick to it! Remember, as well as the buying price you may also have to pay renovation and refurbishment costs, repairs and maintenance, running costs, service test costs, solicitor’s fees – plus, have some change left over for a contingency fund.

Proprietor of Belvoir Sheffield Rick Flay advises, “Don’t let emotion make you overbid. And, don’t enter the bidding process too early as all you are doing is helping push the price up – remember, it’s the last bid that counts not the first. Also, don’t be bullied into bidding in amounts that the auctioneer wants - if he says I need another £5000, you can bid higher than the previous amount by £1 if you want to!”

A clever buyer will also think about what they’re trying to achieve before bidding on a property at auction. An investment property needs to deliver what it promises.

“You can get fantastic bargains at auction but is it a bargain if it's going to sit empty for a few months every year or if it's going to cost a fortune to refurbish or convert before you can even let it?,” says Terry Lucking, proprietor of Belvoir Peterborough and Corby.

“As there is currently an acute oversupply of rental material you've got to look at the long-term investment and it's extremely important that the property works for you financially,” he continues.

“To do this it is paramount that you keep the property occupied. Because of the current rental oversupply, tenants are now buying with the eye. To keep your property occupied it must be in a good area, it must look pretty on the marketing material and, when a tenant walks in, they need to go wow!

Wayne Mearns, proprietor of Belvoir Southend-on-Sea adds, “Ensure you know the area and popularity of such a property so that you may ensure that re-letting is quick.”

So, is your auction property going to be a money spinner or a money pit?

“Don't get too excited about an auction property being cheaper than the open market,” continues Terry. “10 or 20k cheaper may sound attractive at first but this could soon get absorbed if the property is left empty for a few months each year or if extensive renovation is needed.

“If you're a builder, investor or can do the work yourself then you may be able to convert competitively and steal a deal. But if you need to spend a fortune employing contractors to modernise a property, buying at auction could be a false economy for you.

“Surely it's better to put deposits down on multiple already-refurbished properties than buying cheap and spending your capital on kitchens and bathrooms - you probably won't be able to release this capital for at least six months.”

Terry strongly advises that you don't get emotionally washed away with the deal either. “Question your own judgement,” he says. “And, be prepared for others to question your judgement too. Before bidding go and see your local letting agent and get their expert opinion on whether the property is going to be a financially-sound investment for you.”

Proprietor of Belvoir Southend-on-Sea Wayne Mearns adds, “Always inspect the property prior to the auction with a letting agent. We are not specialists at maintenance but we know what the most common faults are when buying an investment property and what will need to be done to bring the property up to a good letting standard.”

• To find your nearest Belvoir office, visit their website at http://www.belvoirlettings.com/

Top tips for buying at auction – 10 dos and don’ts to remember!

Don’t... overbid in the excitement of the sale

Don’t... push the price up by entering the bidding process too early
Don’t... be bullied into large bidding increments by the auctioneer
Don’t... be late. Ensure you arrive early enough to survey your surroundings, sum up the competition and get a good bidding spot
Don’t... be tempted to bid for a property you haven’t done your homework on because the one you originally wanted got snapped up by another bidder

Do... buy with your head not your heart
Do... do your research
Do... stick to your budget
Do... factor in renovation costs
Do... ask yourself why the property is up for auction