Buying a property at auction for a first-time buyer can be a daunting prospect and the majority of first-time buyers won’t consider it as an option.
Properties put to auction tend to be a bit cheaper over the longer term than those sold through a traditional estate agent or solicitor as they tend to be available as a result of repossession, bankruptcy or even the owner passing away.
Whilst potentially cheaper initially you will still require a large amount of cash in advance as typically 10% of your winning bid will have to be paid to the auction house as well as associated auction fees.
Properties sold at auction usually require significant work to bring to a liveable standard which can be off-putting for a new buyer without renovation experience as well as those without the funds to be able to make the improvements.
It’s important to make your lender aware of your intentions to buy a property at auction and taking this route may limit your options as lenders are generally less willing to provide you with a mortgage.
It is also important to view the property in person and to have a survey undertaken to inform you of the value of the property and any points that may not be immediately noticeable to a first-time buyer.
Once the auctioneer strikes their gavel, if you are the winning bidder, the property will be yours. Your ability to bid will be very much dependant on the level of mortgage available to you so it is important to get an agreement in principle from a lender in advance of the auction.