Misconceptions of Buying & Selling Property at Auction

While buying and selling property and land at auction has increased in popularity, there are still a number of misconceptions about these kinds of property transactions.

Here are some of the most common myths and misconceptions about buying and selling at auction to help you better understand auctions, how they work and why buyers and sellers are turning to them.

Auctions are only for cash buyers

Many people are under the impression that they have to be a cash buyer in order to be able to purchase a property at auction. However, this is not true. While using mainstream mortgages to buy via auction is not recommended due to time constraints, there are other options to help fund the purchase, such as bridging finance.

This type of finance allows buyers to receive the funds quickly to purchase a property at auction. Bridging finance does come with higher interest, but most buyers later refinance to a traditional mortgage, as long as the property is mortgageable.

You can’t view properties selling at auction

Before a property officially goes to auction, there’s a marketing period that allows interested buyers to view the property and ask questions. This allows potential buyers to better determine whether they’d like to make a bid on it.

The legal pack is also viewable prior to the auction. This provides an added level of security and transparency, and it’s recommended to get it looked over by a solicitor to ensure you understand everything within the pack of documents.

Auctions are for problem properties

Another common misconception is that property auctions are only for properties with serious issues or that need substantial renovation. This is not always the case.

There is great variety in the type of properties and land that go to auction with some homes being ready to move into straight away. As selling at auction is becoming more common, there will likely be an even wider breadth of properties that go under the hammer moving forward.

Auctions are for desperate sellers

There are a range of reasons why sellers choose to sell via auction. In recent years, there has been an increasing number of sellers who are turning to auctions to take advantage of the many benefits of selling property in this way.

This includes faster turnaround times, a more certain sale and increased transparency, and there’s the opportunity to also secure more competitive prices.

Properties at auction sell for less

One of the biggest misconceptions of auctions is that properties sold through this avenue sell for less than more traditional ways of selling. However, this is another myth. Prices can be extremely competitive. It can reflect the true market value of the property at the time as auctions are considered to be the most up to date indicator of property prices.

Additionally, the competitive nature of auctions can even drive sale prices up for certain properties. This is often due to increased transparency and the opportunity to see bidding in real-time.

Concluding thoughts

Property auctions are continuing to prove to be an extremely viable and efficient way to buy and sell property in the UK, especially with the current market conditions. At the same time, it’s becoming a more suitable type of transaction for a growing number of people.

If you’re looking to sell or buy property through auction, it’s important to understand how these kinds of transactions work… and don’t be fooled by the common misconceptions!

Misconceptions of Buying and Selling Property at Auction