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Top 10 Tips When Bidding at Auction

martin_roberts.jpgBy Martin Roberts- TV Property Expert, Author and presenter of ‘Homes under the Hammer’ offers advice and guidance on all things property related 

Martin’s Weekly Tip: Top 10 things you should know before bidding on a property at auction

1. Your budget. The single most important thing since it is very easy to spend more than you should. Sit down prior to the auction and work out what is the maximum price you can afford – then don’t bid over it!

2. The history of the property. Is this a repossessed house or has someone simply moved out and decided to sell at auction? Knowing who, if anyone lived there before can prepare you for what you might find in the property.

3. What the planning status is. Important if you are planning any major alterations or converting the property. You need to know if planning permission has been granted and if so, when. 

4. What are the costs associated with all the works you intend to carry out. From just a cosmetic ‘touch up’ to major alterations, you need to know how much it is going to cost you so that you can budget accordingly.

5. If you are buying for an investment, what the eventual sales valuation might be once the work has been carried out. From here you can work backwards (on the basis that you know how much the work is gong to cost) to arrive at what should be the maximum bid.

6. If you don’t intend to live in the property yourself, what the demand is for a property of this type once you have done the work. This could be resale demand or rental. How many similar properties are there in the area that are up for sale or rental?

7. What type of person is going to want to live in this property? This should influence your plans for alterations and your choice of fixtures, fittings and décor.

8. What the legal status of the property is. Your solicitor can advise you on this once they have looked through the Legal Pack. You should be aware of any special covenants or restrictions in place which could impact on your development plans for the property.

9. If the property is mortgageable. You may find that you will need to approach specialist lenders if the property is in very poor condition or prepare yourself for the fact that you won’t be able to secure a mortgage on the property. In any event, unless you are a cash buyer, you need to have your finances in place before you bid.

10. What is the likely timescale for completing the work. You will need to have a project plan for the works to be done and any tradesmen lined up and ready to go soon after the auction. If you have borrowed money to finance the purchase, you will be paying interest so its important to keep the timescale under control.

Martin’s Property Clinic:

Moira Wylings emailed me to ask: “What’s the difference between Wet Rot and Dry Rot?” 

Well, if you’re serious about becoming a property investor, it’s important to learn pretty quickly! Wet rot is bad, but Dry rot is potentially catastrophic! Both varieties are generally caused by water or damp entering into a property, due to bad drainage, a leaking roof or a poor damp proof course.  Wet rot usually looks like the kind of fungus or mold growth you will be familiar with.  If treated soon, and the cause of the problem eradicated, there should be no major lasting damage. Dry rot generally happens when there is poor ventilation- such as behind wooden panelling- and looks like spiders webs. Long thin fibrous roots spread through brick, concrete and plaster, destroying all in its path. Its spores are highly active, and the only way to completely get rid of it is to cut out infected materials and treat with special chemicals. If left untreated it WILL destroy a building. Prevention of the underlying cause of any damp or water ingress problem should be one of your top priorities.  

For more information, consider buying a copy of my book Teach Yourself: Making Money From Property, which contains pictures of all kinds of rots, as well as advice on all aspects of property renovation and investment.  Signed copies are available through my dedicated property  website www.makingmoneyfromproperty.TV
If you have a problem or confusion from the property world, Email your questions to askmartin@martinroberts.co.uk . Individual questions may not be answered personally, but could  appear in this column

To find out more about Martin Roberts and for property advice visit www.martinroberts.co.uk
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