On-going data published by the residential bridging loans industry seems to suggest that interest in purchasing properties at auction is at an all-time high. Unsurprisingly, the fact that bridging loan rates have plummeted as low as 0.46% as of late is to some extent fuelling this accelerated interest in key property investment opportunities. UK Property Finance Ltd is currently offering a variety of intelligent financial services with the lowest interest rates in the UK, with the primary intention of ensuring that nobody need pass a golden investment opportunity when and where it presents itself.
Nevertheless, there are certain common issues that buyers face when it comes to purchasing properties by way of auction. As with many things, that purchase process isn’t quite as simple as it may appear to be on the surface, which is why experts advise taking them into account as early on as possible in the process.
Unsurprisingly, the single most common issue is that of entering into agreements when buying a property at what may be a bargain price, only to then struggle when it comes to securing the required capital by the deadlines imposed by the seller.
“First, advise a client to choose a solicitor that has experience of dealing with auction financing and/or bridging loans that require delivery within a tight timeframe,” commented Matthew Tooth, chief commercial officer at LendInvest.
“The buyer should fulfil everything expected of them on time, too,”
“This can range from paying valuation or legal fees and filling out forms to answering enquiries on the purchase,”
“If the period for completion expires, the vendor can give notice; failing to complete before that notice period ends can result in losing the deposit and facing legal fees and compulsion to complete.”
Also of importance is bearing in mind that guide prices are to be interpreted as indications only and that it is important for prospective buyers to remain within their budget. There are various costs that need to be taken into account on top of the purchase price, which in most instances will also include a minimum of a 10% deposit to be paid immediately by the end of the day. As such, carrying out sufficient research to determine exactly how much you are and are not willing to pay for the property is of critical importance.
The same also goes for taking into account the condition of the property as a whole, which for traditional lenders can often pose a significant issue. Regardless of plans to refurbish or remodel the property going forward, there are many lenders that simply will not offer their services for the purchase of a property deemed to be uninhabitable. As such, reliance on mainstream lenders can turn out to be problematic.
Picking up properties for bargain prices at auction has unique and wide-reaching appeal, though is something that should not be attempted without first seeking professional advice and input.
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