Property Auction Finance
Purchasing property at an auction can lead to big loss! …
As a mortgage broker I often hear the following said to me by a client I've seen a great bargain in an auction. Well apart from the danger of getting carried away during the bidding there are other things you need to be aware of if you are thinking of buying at an auction.
If you "win" a bid at an auction then you will normally be required to place a 10% deposit on the day and complete within 28 days. If you cannot complete within this timeframe then you stand losing the 10%
When looking at purchasing at an auction I will only offer my clients mortgages from the quickest of lenders but will also try to suggest the following. Before the auction apply for the mortgage and ensure the lender has provided you with a decision in principle, then get a valuation on the property. The valuation can be used for the mortgage if you are successful but also and more importantly it will highlight any problems with the property which may a) affect what you bid for the property but also b) whether or not a lender will lend on a property.
The valuation may cost £250 for a £100,00 property and if you don't win the property then this is lost money but it is much better than losing a 10% deposit, in this case £10,000
I do agree that a bargain can be picked up at auction but care should always be taken unless you are in the luxurious position of being able to purchase the property with cash, unfortunately that's not many of us!
Written by: Ben Saxton
From: http://www.quicksaleproperty.net
Date written: 19/06/2006
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