How Online Property Auctions Work

The recent downturn in the property market brings with it some substantial benefits especially for those who are looking to invest in a property and are willing to put the effort in once bought to restore the property to its full potential. Property investors make their money by doing just this, buying a property that is below its current market value and taking the time, along with committing to spending the money needed, to sell it back on the open market.

Below market value property is now available to buy online through various competing companies via online property auctions. Similar to any other product auction, the product; in this case the property is submitted to auction by the seller. The auction house reviews the property, speaks to the seller and decides upon a reserve price and auction date. The property is then submitted to a pre auction.

The pre auction window is a period of time given on any property to enable the auction house to market the site and allow potential buyers to pre qualify to bid on the property in question. Once this period is over, generally 7 days, the live auction period begins and buyers nationwide get the opportunity to bid. Once the highest and final bid is agreed, solicitors are instructed, contracts are exchanged and funds are released.

The benefits of a property auction process operating entirely online allow buyers to research and bid online at their leisure and in the ease of their own home as well as providing buyers with significantly discounted property prices. A good auction house will also offer benefits such as no membership fees and clearly state what percentage of the final sale price they will deduct from the property completion.

Properties that go to auction can be sourced from professional sellers like builders, banks and estate agents as well as private individuals. The seller must agree to set the reserve price below the current market value which ensures that the property or ‘lot’ is as attractive to a potential buyer as possible. Property auctions can benefit anyone from honed property investors looking to broaden their portfolio to first time buyers increasing their chances of getting on the first rung of the property ladder.

This article was written by Tom Sangers on behalf of OPA365 who offer Online Property Auctions and a chance of Buying Investment Property

Author: Tom Sangers
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