Auction bridging finance is often the ideal solution for property developers seeking a speedy loan solution. Convenient and quick, an auction bridging loan allows developers to make rapid decisions and take action immediately. As a result, developers can pursue lucrative opportunities that may otherwise be out of reach. 

Bridging Finance Auction Property

Why Do Property Developers Purchase Properties At Auction?

Purchasing properties at auction is commonplace amongst property developers. Frequently, auctioned properties are more affordable, making them an attractive option. Many developers flip properties to turn a profit and they have the best chance of maximising this opportunity if they can get a great deal at a property auction. 

Often, properties in poor condition but in desirable areas are sold at auction at a lower than market price. Developers can make substantial profits from investing in these properties, refurbishing them, then reselling them rapidly. 

Alternatively, they may choose to invest, refurbish, then add the property to their rental portfolio. They can then rent out the property as a holiday let or private dwelling to attract an ongoing income. 

Furthermore, purchasing at auction speeds up the property buying process. There is no need to negotiate or wait as is necessary when dealing with traditional property chains.  

Instead, the property is immediately available without delays, setbacks, or obstacles. Auctions allow developers to complete a deal on the spot without the risk of gazumping. 

Property Auction Bridging Loan

What Is Auction Bridging Finance?

Auction bridging finance is a type of bridging loan product. Its purpose is to allow property developers or property investors to complete purchasing transactions rapidly and conveniently. When developers place their winning bid, they have just a few weeks within which to complete their purchase. 

Auction bridging loans give buyers cleared funds in record time compared to high street lenders. They can help with a loan to the value of up to 85%, making it easier to create long-term plans and arrangements, and start renovations to sell property on. They can even help with the cost of works.

Buying a Property At Auction?

Why Do Property Developers Use Auction Bridging Finance?

Buying properties at auction represents one of the most efficient ways of acquiring properties. There is no need to spend a long time searching property portals, dealing with sellers, and speaking to Estate Agents. Auction bridging finance opens up the possibility of buying properties at auction to developers who lack immediate access to cash.

Auction bridging loans are a versatile solution for all kinds of property purchases. Purchasers can use them to buy residential properties including both houses and flats. They can also use the funding to purchase semi-commercial or commercial properties. 

As a result, auction bridging loans are a convenient and flexible choice for investment property purchases.

What Are The Benefits Of Auction Bridging Finance?

Property sales at auction are fast. They are certainly far more speedy than property sales through the standard selling process. When a property developer wins a bid for a property, they immediately exchange contracts. 

They must, therefore, complete their transaction within just four weeks. In many cases, property developers simply don’t have sufficient cash on hand to cover their transaction. That is where an auction bridging loan can prove to be indispensable. Since auction bridging loans go through quickly, they allow property developers to complete their chosen purchase within the necessary timescale.

With an auction property bridging loan, developers gain the competitive edge during bidding. They need not delay worrying about whether they can secure funding quickly enough or whether they can obtain sufficient funds. 

An auction bridging loan is right there, ready to go. Developers will know precisely how high they can go. They will also know whether they have sufficient left over to cover their refurbishment plans. 

What Should I Know About Property Purchases At Auction?

If you’re considering purchasing property at an auction, there are several factors to keep in mind:

• Property type – you need to know in advance what type of properties you want to invest in. That will make identifying suitable bidding opportunities easier.
• Financial situation – you need to know how much money you can afford to spend. Having finances in place beforehand decreases the chance of your purchase falling through. Therefore, obtaining a quote from a reliable auction bridging loan provider like Madison Carter Finance is a wise idea.
• Property issues – there’s always a reason for selling a property at auction. You need to have a clear understanding of the property’s issues before bidding. That will ensure you are properly prepared and can take potential costs into account before buying. 

How Do I Buy A Property At Auction? 

If you have never purchased a property at auction before, it’s important to know how the process works. For brand-new property developers, the idea of purchasing at auction can cause concern or feel overwhelming. 

At a property auction, everything moves at speed. You must make speedy decisions and be prepared to commit to them. Since purchasing a property involves large sums of money, it isn’t surprising prospective developers may pause before taking the plunge. 

Here, we look at the process of purchasing a property at auction so you can be well-informed. It works like this:

• The first step is to look at the auctioneers’ physical or online brochure. 
• Once you find a property you like, you should inspect it. You may want to consider getting a survey before the auction. If you plan to use contractors to carry out refurbishment works, take them with you to inspect the property.
• If you’re happy with the property, its value, and costs, get a quote for an auction bridging loan from us. You will then know the costs to factor into your budget. 
• The next step is to attend the auction. You should have a clear idea of the maximum amount you’re willing to pay. 
• If you win your bid, you exchange contracts and pay your 10% deposit. Then you have four weeks within which to complete your transaction. You have a legal obligation to buy the property or you risk losing your 10% deposit. You may also face court action for failing to complete the contract. 
• Obtain your auction bridging loan from us. You will receive the money rapidly so you can complete your transaction within the 28-day period. 
• Once you pay the remainder of the property price, you become its owner. You can then start work on any refurbishment project. 
• Once you win the auction, typically, you need to complete in 4 weeks.

Which Questions Should I Ask When Buying A Property At Auction?

There are a few key questions to ask when considering buying a property at auction. Some of the primary questions to address include: 

• Has the property been on the market before? If so, how long was it up for sale?
• Has the sale of this property fallen through before? If so, what was the reason for this?
• How long did the former owners have the property for?
• What is the history of the property?

How Can Madison Carter Finance Help?

Here at Madison Carter Finance, we offer our own high-quality auction bridging loan that meets the needs of property developers. Our product allows prospective purchasers to confidently bid at property auctions. They can rest assured that they will have sufficient funds to complete their transaction within the four-week time period. 

We can offer incredibly fast financing. In fact, our fastest deal takes just three working days before receiving cleared funds. 

To find out more about our auction bridging finance products, contact our team today. We’re looking forward to working with you and helping you purchase your investment property.

 

 

The Financial Conduct Authority (FCA) may regulate your loan. If your loan is regulated we can deal with your application. It must be submitted through an FCA regulated intermediary.