Photos of an auctioneer's hammer, auctioneer and property

Learn how YOU can find property at up to 40% below market value

Real Estate Auction Financing Tips

It’s essential that all financial arrangements are made in advance.

When the hammer falls on your successful property auction bid you’ll pay a substantial non-refundable deposit (typically 10%), enter into a binding contract, and normally have 28 days to complete the sale with all the real estate auction companies. 1% of buyers at a real estate auction don’t have the financing in place and can’t complete on the property. They lose their deposit and can be sued for not completing. Don’t be one of them!

Our FREE! and easy to use Property Auction Calculator includes all of the possible financing costs involved so you can get an accurate comparison for the best deal. Would you have known to include exit fees? That’s just one of the many finance costs people don’t think about. We’ve already done the hard work and have detailed all the costs you need to make an accurate decision in our free calculator.

Property Auction Bridging Loans and Mortgages

Are you looking for short term finance to secure an auction property? We offer Bridging Loans that will enable you to secure the deal....FAST! We can also find you FEE FREE Buy to Let Mortgages to suit your needs! We can help you with Fee Free Property Auction Bridging Loans and Mortgages

The three most common ways to fund your auction property are:

Mortgage

Interest rates and fees are usually lowest when you obtain a mortgage on the property.

There are mortgage companies that specialize in funding properties purchased at a real estate auction, but most won’t guarantee to complete within 28 days. That puts your deposit at risk and opens you to a possible lawsuit.

Choose your mortgage company well before the auction, and be 100% sure that the lender knows they must be able to guarantee timely completion within the normal timescale of 28 days. (Check completion date with your Solicitor)

Business Loan

Business Loans usually have slightly higher interest rates than mortgages, but can be closed quickly, and you can include building costs, buying costs, and selling costs in the loan. Business loans usually require you to provide a 25% deposit but can vary with the lender and the value of the property.

Bridging Loan

When an auction buyer has a temporary cash shortfall, a bridging loan can be arranged through a traditional lender or through an individual broker. The loan will be secured against the property. Think of it as a very short-term mortgage.

Bridging lenders are able to provide funds quickly, and can allow you to complete the sale while you’re arranging longer term financing. These loans normally require a loan to value of 70% of the purchase price.

The most important things to remember about financing

Always arrange financing before you bid.
Make sure your lender understands your plans and can act quickly should you win the property.
Remember that you have to pay the real estate auction company 10% on the exchange of contracts (when the hammer falls).
You usually have only 28 days to pay the remaining 90%.

Property Auction Bridging Loans and Mortgages

Professional bidders do not rush ahead without fully considering the details. Use our FREE! and easy to use property auction calculator as a checklist to cover all the costs involved and to calculate the full amount to finance required.

There are a lot of costs that you must budget for. You can’t afford to guess. Here are some of the categories we have included in the free calculator:

Auctioneer Costs
Buying Costs
Financing Costs
Insurance Costs
Maintenance Costs
Refurbishment Costs
Selling Costs
Solicitors Costs

Have more questions about property auctions? Find answers now:

Never be unprepared to arrange the best financing for your property. Get a complete checklist of all the costs involved and how to calculate them with our FREE! and easy Property Auction Calculator. We’ve done the hard work so that you can make the most profit when you buy at auction.