Buying property at auction can be an exciting and rewarding way to find your next home, investment property, or renovation project. One of the biggest advantages of purchasing at a traditional auction is the speed and certainty it offers. When the hammer falls, or an online auction ends successfully, contracts are exchanged immediately, giving you peace of mind that the property is yours.
Unlike open market property purchases, there is no risk of being gazumped or waiting for a long chain of transactions to complete. With a wide variety of properties available and a straightforward, transparent buying process, property auctions are becoming an increasingly popular choice for buyers looking to secure their ideal property with confidence.
New to buying property at auction? We've answered some of the most common questions to help you bid with confidence.
FREQUENTLY ASKED QUESTIONS ABOUT BUYING PROPERTY AT AUCTION
Q: Do I need cash to buy a property at auction?
A: Not necessarily. While some auction properties are only suitable for cash buyers, many can be purchased using a mortgage, bridging finance, or other forms of lending.
The key difference with auction purchases is the timescale. Once the auction ends and you are the successful bidder, you will usually be required to pay a deposit immediately and complete the purchase within a fixed period, often 28 days.
If you intend to use a mortgage, it is important to arrange an Agreement in Principle beforehand and ensure your lender can meet the auction completion deadline. Some properties may be considered unsuitable security by mortgage lenders due to their condition, construction type, short lease, lack of facilities, or legal issues.
Before bidding, always review the legal pack, inspect the property, and seek professional advice if you are unsure about your financing options.
If a property is specifically described as "cash buyers only", this usually means there is a reason why obtaining a mortgage may be difficult or impossible. Common reasons include extensive refurbishment requirements, structural issues, non-standard construction, a short lease, or legal complications.
If in doubt, contact the auctioneer directly, as they will be able to advise whether the property is likely to be suitable for mortgage finance.
Q: What's the difference between a Cash Buyer and a Mortgage Buyer?
A: A cash buyer is someone who has immediate access to the funds needed to purchase a property without relying on a mortgage or other property-related finance. This could be money held in savings, investments, or funds released from a previous property sale.
A mortgage buyer, on the other hand, requires a lender to provide some or all of the purchase funds. Mortgage applications involve valuations, affordability checks and legal processes, which can take time to complete.
When buying at auction, both cash buyers and mortgage buyers can bid on many properties. However, auction purchases usually require completion within a fixed period, often 28 days, so it is important that any finance is arranged as early as possible.
Some auction properties are advertised as "cash buyers only". This typically means the property may be difficult to mortgage due to factors such as its condition, construction type, legal issues, short lease, or lack of essential facilities. In these cases, buyers may need to use cash, bridging finance, or specialist lending products.
If you plan to buy at auction using a mortgage, it is advisable to speak to a lender or mortgage broker before bidding and ensure you understand the timescales involved.
Q: Why is the guide price so low?
A: The guide price is not necessarily the amount a property will sell for. It is simply an indication of the seller's minimum expectation and is used to generate interest ahead of the auction.
Auction properties often attract competitive bidding, particularly if they are in a desirable location or offer development, investment or refurbishment potential. As a result, many properties sell for significantly more than their guide price.
Guide prices may also be set lower to encourage a wider audience of potential buyers and create competitive bidding on auction day.
If you're interested in a property, it's important to carry out your own research, arrange a viewing where possible, review the legal pack, and consider comparable local sales before deciding how much you are prepared to bid.
Remember, the guide price is only a guide — the final selling price may be higher or lower depending on market conditions and buyer demand.
Q: Why are some auction properties so cheap?
A: Auction properties can sometimes appear to be priced well below their market value, but there is usually a reason.
Some properties require significant refurbishment or repair, while others may have legal, structural or tenancy issues that make them unsuitable for a conventional sale. In other cases, the seller may simply be looking for a quick and certain sale rather than waiting for the right buyer on the open market.
Properties commonly sold at auction include renovation projects, probate properties, repossessions, investment properties, land, development opportunities and homes with unusual features or circumstances.
It's important not to assume that a low guide price represents a bargain. Before bidding, always carry out thorough research, arrange a viewing where possible, review the legal pack and consider any additional costs that may be involved.
Many auction properties attract strong interest and ultimately sell for considerably more than their guide price.
Q: Are auction properties a good investment?
A: Auction properties can offer excellent investment opportunities, but as with any property purchase, success depends on carrying out the right research and buying at the right price.
Many investors use auctions to find properties with renovation potential, below-market-value opportunities, development sites, tenanted investments and land. Because auction sales are transparent and have fixed completion timescales, buyers can often move more quickly than through the traditional property market.
However, not every auction property is a bargain. Some properties may require extensive refurbishment, have legal or structural issues, or attract significant competition from other bidders.
Before bidding, it's important to inspect the property, review the legal pack, understand all associated costs, and establish your maximum bid in advance. Experienced investors focus on the property's potential value, rental income or development opportunities rather than simply the guide price.
For those willing to do their homework, property auctions can be an excellent way to build a portfolio, secure development opportunities, or acquire properties that may not be available through traditional estate agents.
Can a property sell before the auction?
A: Yes. Some auction properties are available for sale prior to auction and may be sold before the auction date if an acceptable offer is received by the seller.
If you're interested in a property, we recommend contacting the auctioneer as soon as possible to check its availability and register your interest. The auctioneer will be able to advise whether pre-auction offers are being considered and explain the process involved.
Please note that not all properties can be sold prior to auction, as this will depend on the seller's instructions and the auctioneer's terms.
What is Bridging Finance?
A. Bridging finance (or a bridging loan) is a short-term loan designed to help buyers complete a property purchase quickly, often before longer-term finance such as a mortgage can be arranged.
It is commonly used by auction buyers because auction purchases typically require completion within a fixed period, often 28 days. A bridging loan can provide fast access to funds, allowing the buyer to meet the completion deadline and secure the property.
Once any refurbishment works have been completed, planning permission obtained, or the property becomes suitable for mortgage lending, many buyers then refinance onto a standard mortgage and repay the bridging loan.
Bridging finance is often used for properties that may be difficult to mortgage initially, including renovation projects, properties in poor condition, non-standard construction homes, development opportunities, or lots requiring a quick purchase.
While bridging finance can be a useful tool, it is generally more expensive than a traditional mortgage. Buyers should always seek independent financial advice and ensure they fully understand the costs, terms and repayment strategy before proceeding.
If you're considering using bridging finance to purchase an auction property, it is advisable to speak to a specialist broker before bidding.
Before You Bid
Remember that a successful auction bid is legally binding. Always:
- View the property
- Review the legal pack
- Arrange finance beforehand
- Obtain professional advice where necessary
- Set a maximum bid and stick to it
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Below is a brief step by step to the buying process, however we also suggest watching our video for a bit more insight.
1: House auctions - source future auction property
House auctions are growing in popularity in the UK. To buy property at auction, start by identifying lots of interest and contacting the auction house for details—ideally 2-3 weeks before the auction. We aim to add properties to our database within 1-2 days of the catalogue release.
Allow at least 10 days for due diligence, including viewing the property, reviewing the legal pack, arranging finance, asking the auctioneer for additional details, and registering to bid.
The guide price is an indication of the seller’s current minimum acceptable price for the property at auction. It is provided to help buyers decide whether to pursue a purchase.
The guide price may be shown as a single figure or a price range and is usually set within 10% of the reserve price. However, the reserve price is not fixed at the start of marketing and may change at any time up to the auction, depending on interest.
Please note, the guide price is different from the reserve price, and both may be subject to change prior to and including the day of the auction.
2: Viewing the property
Call the auction house to find out about viewing arrangements. The auctioneer will either take a deposit for the keys and allow you to view the property unaccompanied or they will organise for a local agent to show you around. There might also be Virtual Tours available on the auctioneers' websites, if you're unable to visit in person.
3: Register interest with the auctioneer
Once you have viewed the property, register your interest with the auctioneers to ensure you are kept up to date regarding the property, and make sure you register for the legal pack. Ask the auctioneer to contact you should any of the property details change or if the property is sold prior to the auction or if it has been withdrawn.
4: Due diligence and legal packs
Request the legal pack from the auctioneer as soon as available to allow time for due diligence.
Buying at auction is different from buying through an estate agent. The legal pack, prepared by the seller's solicitor, includes important documents like special conditions of sale, title deeds, and searches. We recommend getting legal advice to review these documents thoroughly.
Before the auction, check with the auctioneer and the legal pack for any additional buyer’s fees, such as administration charges, reservation fees, or buyer premiums. These costs are payable on completion, but stamp duty and taxes are not included. Make sure to verify all fees in the Special Conditions of Sale.
If you're the winning bidder, the auction team will contact you for the deposit and any additional fees. Check which payment methods the auction house accepts before the auction.
Below are a few useful guides worth reading when you have a spare minute include:
- How to Spot Damp Before Buying a Property
- How to Spot Subsidence Before Buying a Property
- How to Identify Structural Problems in Auction Properties
- Pros and Cons of Buying Leasehold Properties at Auction
- How to Mitigate Legal Risks When Buying at Auction
- Risks of Buying Properties with Planning Issues at Auction
- Understanding the Risks of Buying Unseen at Auction
- Common Bidding Mistakes That Cost Buyers Money
- The Importance of Searches in Auction Property Purchases
5: Finances
Determine your maximum bid by factoring in costs like repairs, solicitor fees, surveys, mortgage, removal charges, and furnishings. Add these to the amount you’ll need to borrow.
If you win, you’ll need to pay a 10% deposit immediately, subject to a minimum fee, plus any other fees.
Ensure you have financing (like a mortgage) secured before bidding, as a survey is often required. Completion is usually 20 working days after the auction—check the special conditions for any changes.
Note: The guide price excludes additional fees like buyer’s contract fees, stamp duty, VAT, and legal costs. Check the Auction Legal Packs for full details.
To reiterate, Always check the Legal Pack and Conditions of Sale to see if a Buyer’s Premium applies, as this means extra costs for you. If unsure, contact the auctioneer or ask your solicitor for clarification.
6: AML checks and Buyer's I.D.
Under the Money Laundering Regulations 2017, part of registering to bid is to carry out AML checks (anti money laundering) that are legally required before you can be approved as a bidder. You may be required to complete a remote verification check. To find out which identification documents might be required, you can view on the Government website.
7: Bidding: live streamed auctions
To bid on a property, you must register with the auction house before the auction. Registration usually opens 5-7 days prior, and the approval process may take a few days, so allow enough time.
Many auctioneers now offer live-streamed auctions (remote bidding). Contact the auctioneer to check available options, such as:
- Telephone Bidding: The auction team contacts you to place bids over the phone. If contact is lost, they’ll bid on your behalf up to your maximum bid.
- Proxy Bidding: The auction team bids for you on auction day.
- Internet Bidding: Once registered and paid, you can bid alongside the live stream.
8: Bidding: in the auction room
If attending a live auction, arrive early to hear any updates, like price changes or withdrawn lots. Call the day before to confirm the start time and avoid a wasted trip.
When your lot comes up, confirm the address before bidding. You may be given a card to wave at the auctioneer, or simply raise your hand.
If someone bids higher, the auctioneer will return to you for a chance to bid again. They’ll announce "first, second, third and final time—sold!" Stick to your max price to avoid overbidding.
Telephone and proxy bidding are usually available, but ask about internet bidding.
9: Successful bidder
A property typically has a reserve price. If your bid meets or exceeds it, the vendor is legally bound to sell to you.
If you win, the auction team will contact you during the auction to arrange the deposit. Once received, you’ll get a Memorandum of Sale with any special conditions.
Auctioneers will guide you on the next steps, but it's a good idea to ask about them before the auction to be fully prepared.
10: Insurance
Once the gavel comes down the property becomes your responsibility. Again, the auction house or your solicitor should be able to advise you as to what insurance needs to be arranged from the get go.
11: Balance of payments
The balance of payment usually needs to be transferred within 28 days of the auction or the timescale set by the vendor. Remember, if this is not achieved you will forfeit your 10% deposit.
Disclaimer: All property information that we provide on our website, including auction dates, auctioneers' contact details, property descriptions, images, and pricing, is provided for informational purposes only. While we do our best to ensure property details are accurate, we can’t take responsibility for errors or omissions. Please contact the auctioneers directly to verify details and ask any extra questions. We always recommend that buyers carry out their own due diligence before bidding, including reviewing the full auction legal pack provided by the auctioneer.