I’m a property auctioneer and this is how you can buy a house for as little as £24,000

HOUSE hunters can get a bargain at auction, with properties selling for as little as £24,000 – but it can be a tricky process.

We spoke to expert Andrew Parker, lead auctioneer at SDL Auctions, about how to prepare and what to avoid if you’re considering a bid.

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Andrew has shared his insider knowledge to help buyers considering buying a property at auction.

There are plenty of potential downsides to be aware of, such as hidden costs and often extensive DIY work.

But there’s also an opportunity to snap up a bargain new home or investment property.

For example, a two-bedroom home in County Durham recently sold at auction for just £24,000.

Here’s everything you need to know about buying a home at auction.

Choose the right time and place

August is usually the quietest time in the property auction calendar, so you might be able to snap up a deal with less competition.

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But the pandemic has shaken up the usual timeline and all months of the year are busy at the moment, Andrew said.

You also need to consider where in the country you want to buy.

If you’re planning on living in the house this will obviously depend on where you want to be based.

As you’d expect, properties in the north of England tend to be cheaper than those down south.

Landlords might be better off buying in the north but if you want an investment property to sell on at a higher price, the south is a better bet for a quick profit.

Check the legal documents

One of the most important things you can do when you’re preparing to buy a house at auction is read the legal documents in full.

If you’re the winning bidder you’re legally bound to buy the property, so you need to be aware of any hidden costs.

It could be worth paying a legal professional to check them over for you – any cash spent now could save you a fortune in the future.

Be on the look out for buildings with cladding or non-standard construction – this will be detailed in the documents and you might want to avoid those traps.

Andrew said: “Buyers must read the legal pack and they must read special conditions of sale.

“I would always recommend people pay £100 to go to a solicitor to read it for them, because you might not know what you’re looking at.”

He added: “You can’t breeze into it and hope it works out because that will end in tears.”

Set a budget and be realistic

When you arrive at – or log on to – an auction, you should have already set a budget – and make sure you stick to it.

Also calculate how much you might need to spend on any renovations or decorating.

Andrew pointed out the difference between a reserve price and what the property might actually sell for.

Some people see the reserve price and think that’s what they might end up spending on the home.

But that’s actually the minimum price the seller is willing to accept, so it’s likely to be more than that.

You should always compare the price with other, similar, properties in the area to make sure you’re getting a good deal.

You’ll also have to pay fees on top of the sale price.

The amount is usually a percentage of the final price, but will differ depending on what kind of sales mechanism is used.

For example, if it’s an unconditional with fixed fee sale, SDL would charge you an extra £1,074.

But if it’s a conditional sale with reservation fee, you will have to pay a minimum of £6,000 extra.

Check the legal documents thoroughly for details of extra charges and don’t forget to factor in stamp duty.

It’s important to get your finances in order before the auction.

Some high street banks will give you a mortgage for auction properties but you could also explore specialist lenders.

If you opt for the latter, you’ll need a bigger deposit.

But many vendors prefer cash buyers, which means you’d need to pay for the whole house up front.

Ask about other properties

It’s worth looking at properties that have previously failed to sell at auction, as the seller might be more willing to consider offers.

You can find these houses on auction house websites.

Buyers don’t necessarily need to wait for the auction date either.

If you’ve spotted an interesting property that’s set to go up for auction in the next few months, try reaching out to the seller beforehand.

Andrew said: “Look at lots that haven’t yet been offered at auction and have a conversation with the auctioneer about whether it could be sold beforehand because sometimes there’s an opportunity there.

“If the vendor doesn’t want to wait weeks for the next auction date and they can secure a sale beforehand, some vendors will prefer that and choose to accept that.”

Never buy without viewing

It could be tempting to buy a home without viewing it if you spot something at a super-low price.

But if a property has a bargain basement price, there’s usually a reason for it.

It might need extensive renovation work, for example.

Andrew is clear that you should never bid on a property without seeing it in person first.

He said: “In the north east there are still properties you can by for less that £20,000

“What I would say to people is that there is generally a reason for that and I would make sure that you really do do your homework before you get involved.

“It is quite common for investors to buy something in the north east that they’ve not seen and think that it’s spectacularly good value for money because it was only £25,000.

“But you may find that that’s the one house on the street where the curtains look nice but the rest of the street is all boarded up.”

You can arrange a viewing by contacting the auction house that is listing the property.

Just like buying through an estate agent, you’re entitled to have surveys and searches done before deciding whether the house is right for you.

This will cost you money – and you might not end up buying the house – but it’s money well spent, especially if you’re an auction newbie.

There are different levels of surveys, and how much it will cost depends on which one you opt for and the value of the property.

Most go for a mid-level survey that looks at what repairs and maintenance will need to be done, as well as issues such as damp and whether it meets current building rules.

A more thorough check is recommended for houses in a poor condition, and the surveyor will beyond surface level issues such as in the attic or under floorboards.

A survey could set you back between around £500 and £1,000 – but it could be less if the property is worth under £100,000.

This post first appeared on thesun.co.uk