A buyer’s guide to online property auction

Author: Francis Firth
Article: 4Mins

Buying a property at auction has been steadily gaining in popularity and you may have been considering it for your property, but you’re just not sure it’s right for you. The good news is, auction isn’t just for cash buyers and investors, although a great option if that’s you! Anyone can nab their dream home at auction and the great news is, you can also buy a property at auction with a mortgage.

If you’re struggling to get on the ladder, due to getting gazumped or because of long completion times in the open market, the Modern Method of Auction (MMoA), also known as online Conditional Auction, might hold the key to securing your dream property. As the method of sale becomes more popular, you’ll find spacious family homes, stylish city apartments, idyllic barn conversions and even seven-figure showstoppers being regularly bought through online property auctions.

Online property auction can provide financial benefits as well as a wider choice of properties. For iamsold properties, the current average house price across our whole portfolio is around £159,000* which is under the current UK average of £264,000, so there really is something for everyone at auction – whether snapping up a bargain or splurging on something spectacular.

Yes, you can buy a property at auction with a mortgage

It is not just cash buyers who can pick up a property at auction. Buyers can use a mortgage to fund their property auction purchase thanks to MMoA’s 56-day timescale^, which enables a wider variety of buyers to take advantage of property auction to find their new home, even first-time buyers, as it’s plenty of time to obtain a standard mortgage.

So how does buying a property at auction work? Have a read of our handy buyer’s guide below:

How to buy a property at auction 

Register your interest

Once you’ve found a property you like the look of, you can physically view the property (whilst abiding by COVID guidelines) or virtually ‘view’ it on the Estate Agent’s website. If you’d like to find out more and are considering placing a bid, you’ll first need to register with the Estate Agent and/or the agent’s chosen auction partner. Once registered, you’ll be able to access a Buyer Information Pack for the property you are interested in, so you can make an informed decision before placing a bid. This will include documents such as a Local Authority Search, Water and Drainage Search, Mining Search, Property Information Form, Fixture and Fitting Form, Title Register and Title Plan. You wouldn’t ordinarily see these documents until you started the Conveyancing process with traditional, Private Treaty sales. Getting this information upfront helps you to be sure that this is the right home for you.

Be prepared

You will usually need to register before you can place a bid, which will involve an ID check and in some cases a pre-authorisation payment process. Make sure you have all the relevant documentation you need to avoid any delays to your purchase.

Figure out the finance

Before bidding, it’s important to consider your budget and if your desired property fits within this. Your Estate Agent and/or auction provider will ask buyers how you intend to fund the purchase, so speaking to a Mortgage Advisor is recommended.

Keep an eye on the time

It’s worth taking note of when the auction ends, so you don’t miss the opportunity to place your bid. On average, auctions are live for around 7-30 days. With Modern Method of Auction, property auction bids can be made 24 hours a day, seven days a week at a time and place that suits you.

Sign on the dotted line

To secure the sale as the successful bidder, you will be asked to pay a non-refundable deposit or Reservation Fee*^ via direct debit or the previously agreed pre-authorisation process. You will then need to sign a Reservation Agreement, committing both parties to complete the purchase. From this point, the completion process will begin, which is aligned to a fixed timescale of 56-days^ for the Modern Method of Auction. You will need to appoint a Solicitor to help with the legal side of the sale.

To find out more about the benefits of buying a home via the Modern Method of Auction and to explore some of the great properties available, visit www.iamsold.co.uk/auction.

A detailed look at the buying process

With auction, get a great deal and benefit from a much faster, more seamless way of buying property.

Buying at Auction
A detailed look at the buying process
Additional information:
*iamsold average sale price January 21 – November 21 £ £159,164versus UK average UK House Price Index – Office for National Statistics (ons.gov.uk).
^Based on standard properties. From receipt of draft contracts
*^For iamsold auctions, the non-refundable reservation fee or deposit required to be paid by buyers is 4.5% of the sale price subject to a minimum of £6,600 inc. VAT, to be paid within 2 hours of the auction ending if you are the successful bidder.

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