As buying property at auction becomes only more popular, it is of great importance that buyers are aware of how to prepare for a plot auction. To find out about buying property at auction, and to get a few useful bidding tips, click here.
How to Prepare for a Plot Auction: Part One
Pre-Trading and Homework
When you begin to take notice of the auction market, you will notice that when a lot catalogue is published, or at some point not long afterwards, some lots might be withdrawn because of a prior sale. One important way in which you can prepare for a plot auction is to register your specific interests with the auction house to ensure that you don’t miss out on the lots you are especially interested in. The auction house will know of lots coming up months in advance, and can let you know about them if you have told them what you’re looking for.
Some may not accept a pre-sale bid, but others will. In the case that you are interested in a certain plot, you will need to immediately make decisions regarding price and get in touch with the auctioneer to make your bid.
Whether the pre-sale bid is accepted or not, make sure you get copies of the legal documents which the auctioneer can provide at the viewing stage. One major part of how you will want to prepare for a plot auction is by running these papers past your solicitor to find out any possible issues regarding planning, access, services, etc, before the auction takes place.
How to Prepare for a Plot Auction: Part Two
Guide Prices, and What you should Pay
Today, it is much easier to prepare for a plot auction when it comes to guide prices. In 2006, when the housing boom was in full swing, bids would often start to come in well above the top guide price. These days, the guide is much more realistic in determining what you could end up paying. A reserve price might be set, which if not met will mean the property does not sell, and bidding will usually begin below this price to get the bidding momentum going.
When you prepare for a plot auction, make sure to set your own limit. This should be a price you are willing, comfortable, and able to pay. To determine what this limit should be, you’ll need to work out the value of the plot. This can be done by setting an end value for the project and subtracting from that the build costs and a further 10-20% (for profit). The resulting figure should represent the true value of your desired plot.tagsadviceauctionproperty