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Why buy auction property?

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The main reason people want to buy auction property is to get a cheap one. So, is it fair to assume that auction property is cheap? In short, yes. Well it can be (as with most things it isn’t foolproof). There are however other reasons why buying auction property is a good idea.

To start with we’ll look at why it’s possible to pick up a cheap property at auction. Property auctions are the main way that repossessed properties are sold. Because of the need to sell repossessed property as quickly as possible, due to the lender wanting to reclaim any monies held up in the value of the property as quickly as possible so as to recoup their losses. In order to get a quick sale, the property will often sell at lower than market value simply to ensure a fast sale. This is great for the lucky buyer who bags a property bargain, so it’s definitely worth pursuing this avenue of purchase.

It’s not just repossessed properties that need to be sold quickly. If someone is moving abroad or is trying to sell an inherited property quickly or because of a divorce or separation, or a property investor trying to turn a profit, then they’ll be likely to accept a lower than market price for their property in order to shift it quickly.

Selling property quickly is a two fold benefit for buyers. In addition to getting a cheap property, the fact that it’s sold quickly means not being messed around with broken chains or buyers pulling out. Actually this is true of all auction sales because once the hammer is down, the sale is final, but someone wanting a fast sale will usually set a lower reserve price. This is music to the ears of anyone who’s been gazumped or let down by buyers or sellers.

There’s a common misconception that when you buy auction property, you’re doing so without really knowing what the property is like. That/s not true. Just like buying a property through an estate agent or private sale, you can visit the property before the auction. The property will either be available for individual viewings or an open house style viewing at an allotted time. Either way, potential buyers can assess the properties value (which is virtually impossible without seeing it in person). This in turn helps when setting an upper limit on bidding, which is essential because it’s so easy to spend more than you actually wanted to when you’re in the emotional atmosphere of the auction room.