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Repossessed property auctions

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Repossessed property auctions are a great place to buy a property at less, sometimes much less, than its market value. When a property has been repossessed by a mortgage lender, the lender wants to sell the property as quickly as possible in order to recover the maximum from the losses incurred by the defaulted mortgage. What this means for buyers is a seller who is more interested in achieving a fast sale than getting the highest possible price for it.

All that said, there are some essential tips to avoid the common mistakes that can lead to either overpaying for a property or buying a lemon. The following tips are a beginner’s guide to buying property at auction, whether it’s an investment, residential or commercial purchase:

* Research – this applies to both the property and the auctioneer. If you’re buying a property as an investment to sell on or rent out, do plenty of research on the surrounding area. This research should focus on whether the property meets your needs (e.g. if you’re planning a family home, student share house or swanky apartment) and whether the location meets your needs. Also, check out the auctioneer’s credentials too, it won’t take long and it’s well worth the peace of mind.
* View the property before the auction – this is tied into the last point but it deserves an individual mention. You should always visit the property yourself before bidding on it and not rely on the auction catalogue alone. It’s a good idea to get a survey done on the property too. While it is frustrating if you’re forked out for a survey only to lose out at auction, but the potential costs to repair unseen damage can be enormous.
* Become auction savvy – ok, this can only really happen after bidding at several auctions, but you can learn a lot by attending repossessed property auctions and observing the customs. Simply being familiar with the order of proceedings and terminology will reduce nerves on the day and make you better prepared for some sterling bidding.
* Set a limit – and stick to it! However good our intentions, emotion can get the better of even seasoned buyers at auction so always, always set your upper bidding limit and don’t ever go over it. If you factor in all the additional costs associated with the purchase (legal, mortgage and survey etc.) into your budget before the auction, you’ll have a clear idea exactly how much you can bid up to.