What can "Homes under the Hammer" teach you about property auctions ?
It’s hard to imagine anyone not being aware of the TV programme Homes under the Hammer. This daytime TV show has semi-cult status, as thousands watch every day to see the real life successes and failures of people buying at auction. But many forget that lifestyle and factual shows such as this are also incredibly helpful, as they provide us with case studies from which we can learn the pitfalls and best practice for when we take our own first step toward a property auction.
So what can you take away from an episode of Homes under the Hammer to help you buy at auction?
1. The danger of the unseen
There are probably gasps of disbelief up and down the country when a buyer announces that they have not viewed a property they have purchased at auction. We watch in anticipation, wondering what will greet them behind the run down façade. Occasionally they get lucky and breathe a sigh of relief, but more often than not they discover a property that requires more work than they had anticipated. Lesson 1 – view any property you’re thinking of buying. We hold viewing days where we can answer any questions you may have. If you can, bring a builder or an architect along to get an expert’s viewpoint.
2. Buying to sell or let?
• Are you buying a home or an investment?
• Is your investment to sell or to let?
These are important questions you need to answer when searching for a property. There are many episodes in which buyers have bought to sell but didn’t do their figures correctly or control their budget, and therefore have had to turn to letting. Lesson 2 – seek advice if you’re buying for investment, to ensure the desired property is going to achieve your goals. At Bidmead Cook we will discuss all the options, and also potential income and capital growth. You need to know your figures to be able to ascertain the right direction to go in. Extra tip – Remember to budget a contingency pot, as there are always unexpected expenses along the way.
3. Reader of the pack
One particular episode springs to mind here, in which a buyer didn’t read the legal pack he was given. As a result, he failed to see the covenants on the property, and later realised why he had got the property for what he thought was an absolute bargain.
Lesson 3 – when you’re given the legal pack, read it thoroughly, don’t miss a sentence. We would advise that you get a solicitor to look over it on your behalf, then you know you haven’t missed or misinterpreted anything.
4. Caught in the moment It’s easily done, you’ve seen something you want, and you just have to have it. Your competitive streak takes over and before you know it the hammer sounds and it’s all over – but what did you pay? How many times have we seen people overpay for a property on Homes under the Hammer?
Lesson 4 – set a budget and stick to it, but first do your research to ensure it is realistic in today’s market. No self-control? Take someone along who will stop you, should the urge take you to bid more.
If you have never bought at auction and would like more information on the process, contact a member of our auctions team.